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Need help with Part B: Intro A corporate bond with annual coupons has a face value of $1,000,4 years to maturity and a coupon rate
Need help with Part B:
Intro A corporate bond with annual coupons has a face value of $1,000,4 years to maturity and a coupon rate of 7%. The market interest rate for similar bonds is 0.085 . Part 1 Attempt 1/3 for 10 pts. What is the price of the bond (in \$)? Correct Annual coupon: Coupon = Coupon rate Face value =0.071,000=70 Bond price: P=rCoupon[1(1+r)T1]+(1+r)TParvalue=0.08570[1(1+0.085)41]+(1+0.085)41,000=950.87 Part 2 Attempt 1/3 for 10 pts. What is the bond's duration
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