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Problem 4 A $1,000 bond with a 4 years life is paying a semiannual coupon at an annual rate of 5%. The required rate of
Problem 4
A $1,000 bond with a 4 years life is paying a semiannual coupon at an annual rate of 5%. The required rate of return is 4%.
- Compute the PV of the bond
- Compute the duration of the bond ?
Compute and interpret the volatility of the bond (modified duration)
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