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In the fixed income market, there are two types of bonds: 1 . Bond A: Newly issued coupon bond Fixed coupon rate = 5 .
In the fixed income market, there are two types of bonds:
Bond A:
Newly issued coupon bond
Fixed coupon rate
Nominal value Euros
Maturity period years from today
Redeemed in the form of annuity payments, with the first payment one year from now
Current market price: Euros
Bond B:
Perpetual bond
Next coupon payment of Euros to be made in one year
Coupon payments will decrease by each year
What is the duration of Bond B
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