Rate Convention: 1 = EAR, 0 = APR	0
Annual Coupon Rate (CR)	10,0%
Yield to Maturity (Annualized) (y)	5,5%
Number of Payments / Year (NOP)	4
Number of Periods to Maturity (T)	8
Face Value (PAR)	$1 000
Outputs
Discount Rate / Period (r)
Coupon Payment (PMT)
Period
Time (Years)
Cash Flows
Present Value of Cash Flow
Weight
Weight * Time
Duration
Modified Duration
(b) Consider a zero coupon bond maturing in 1.5 years with face value of $1,000. Would this zero-coupon bond have longer or shorter
duration than the bond described above? Explain why.
(c.) Using the bond in part a, calculate approximation to the new bond price if the yield to maturity increases by 1%.
Use modified duration in your calculations