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Problem 3 a. An investor buys a 7% annual payment bond with three years to maturity. The bond has a yield-to-maturity of 9% and is
Problem 3 a. An investor buys a 7% annual payment bond with three years to maturity. The bond has a yield-to-maturity of 9% and is currently priced at 94.937411 per 100 of par. Calculate the bond's Macaulay duration? Use the grid method. Label all columns b. Calculate the bond above's Modified duration. C. The bond above is Bond Ain the portfolio below. Calculate the portfolio's modified Duration. Bond Market Value Modified Duraton Bond A $47,468.71 ? Bond B $63,512.16 3.8 Bond C $39,648.21 9.3 Portfolio
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