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A bond has a yield to maturity of 8 percent. It matures in 10 years. Its...

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Finance

A bond has a yield to maturity of 8 percent. It matures in 10years. Its coupon rate is 8 percent. What is its modifiedduration?  The bond pays coupons twice a year.

(Do not round intermediate calculations. Enter your answersrounded to 2 decimal places.)

Answer & Explanation Solved by verified expert
3.8 Ratings (582 Votes)
Step1 Calculation of Macaulay Duration of the Bond Period 1 Cash Flow 2 Present Value Factor T 400 3 Present Value 4 3 x 2 Weight to total 5 Duration 6 1 x 5 050 40 096154 3846 00385 002 100 40 092456    See Answer
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