Question
The following table contains the current prices for zero-coupon bonds of different maturities. Note that prices are based on a face value of $100. Maturities
The following table contains the current prices for zero-coupon bonds of different maturities. Note that prices are based on a face value of $100. Maturities are in years.
| Bond | Maturity | Price |
|---|---|---|
| Q | 1 | 97.9432 |
| R | 2 | 95.6474 |
| S | 3 | 93.3123 |
Bond T is a coupon bond with a coupon rate of 2% maturing in 3 years. The bond pays coupon annually, and has a face value of $100. What is the Macaulay duration of the coupon bond?What is the modified duration of the coupon bond?
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Generational Wealth Personal Financial Handbook
Authors: Sherique Dill
1st Edition
1985161222, 978-1985161221
