(a) What is the duration of the coupon bond if the current yield-to-maturity (R) is 8 %? 10 %? 12 %?

Coupon bond: Par value = $1000 Coupon rate = 10% Annual payments

(b)How does the change in the current yield to maturity affect the duration of this coupon bond?

(c)Calculate the duration of the zero-coupon bond with a yield to maturity of 8 %, 10 % and 12%.

Zero-coupon bond: Par value = $1000 Coupon rate = 0%

(d)How does the change in the yield to maturity affect the duration of the zero-coupon bond?

(e)Why does the change in the yield to maturity affect the coupon bond differently to the way it affects the zero-coupon bond?