Question
Suppose you are considering investing in two bonds, Bond X and Bond Y. Bond X has a face value of $1,000 and an annual coupon
Suppose you are considering investing in two bonds, Bond X and Bond Y. Bond X has a face value of $1,000 and an annual coupon rate of 5%, while Bond Y has a face value of $1,000 and an annual coupon rate of 6%. Both bonds have a maturity of 10 years and a yield to maturity of 4%. Using the modified duration formula, determine the modified durations of Bond X and Bond Y.
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Contemporary Financial Management
Authors: James R Mcguigan, R Charles Moyer, William J Kretlow
10th Edition
978-0324289114, 0324289111
