$($Fixed Income Securities $)$

Q$7)$ Calculate the duration of a $2$ year bond with a face value of $200$ that pays a $5\%$ coupon

semi$-$annually. The discount factors are given in the following table.

A$)1\mathrm{.}93$ years

B$)2\mathrm{.}14$ years

C$)2\mathrm{.}00$ years

D$)1\mathrm{.}22$ years

Q$8)$ Calculate the duration of a $2$ year bond amortizing bond with a face value of $200$ that

pays a $5\%$ coupon semi$-$annually. The coupon is paid on the outstanding amount and

subsequently $50$ of the principal is paid to the bondholder each $6$ months thereby reducing

the outstanding amount. The discount factors are given in the table of question $7.$

A$)1\mathrm{.}93$ years

B$)2\mathrm{.}14$ years

C$)2\mathrm{.}00$ years

D$)1\mathrm{.}22$ years