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  3. a portfolio consists of two newly-purchased bonds

A portfolio consists of two newly-purchased bonds as follows: Bond A, with par value...

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Finance

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A portfolio consists of two newly-purchased bonds as follows: Bond A, with par value of $100 and 5-year term, has annual coupons at 8%. Bond B, with par value of $200 and 2-year term, has semi-annual coupons at 3%. Each bond has annual yield of 5%. Calculate the duration, in years, of this portfolio at time of purchase. (A) 2.61 (B) 2.73 O OD) 2.85 O(E) 2.97 (C) 2.79

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