Explain the concept of duration in bonds. Select at-least two bonds each from the below bonds with long term and short term maturities (Eg 10 years as long term bond and 1-3 years as short term bond) and calculate their duration etc. Suggest which of these will outperform/ underperform in declining and rising interest rate scenarios. (Assume interest is being paid annually). You can use the excel function (DURATION) to calculate duration. 20 Marks

Symbol NHAI NHAI SBIN IRFC IIFCL HUDCO IIFCL M&MFIN Coupon Rate 8.3 8.2 9.95 8 8.66 7.64 8.91 9 YTM 5.6384 5.6276 7.886 5.1262 6.034 5.9595 5.8239 9.0053 Face Value 1.000 1.000 10,000 1.000 1,000 1,000 1,000 1.000 Last Traded Price 1.235.00 1.133.00 11.445.00 1.137.00 1.152.11 1.180.00 1.350.00 1.022.01 Maturity Date 25-Jan-27 25-Jan-22 16-Mar-26 23-Feb-22 22-Jan-24 8-Feb-31 22-Jan-34 6-Jun-26