Question
A bond with $1,000 face value, 10% coupon, market interest rates of %10, and 10 years to maturity. a.Calculate the duration of the bond. Show
- A bond with $1,000 face value, 10% coupon, market interest rates of %10, and 10 years to maturity.
a.Calculate the duration of the bond. Show calculation.
b.Assume that market interest rates decreased to 5%, re-calculate the duration of the bond
c.Comment generally on the relationships between the interest rates, coupons, and duration
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Managerial Economics Applications, Strategies and Tactics
Authors: James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
13th edition
1285420926, 978-1285962399, 978-1285947853, 1285947851, 978-1285420929
