Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. what is the duration of a 2 year bond that pays a

What is the duration of a 2 year bond that pays a 5% annual coupon with...

80.2K

Verified Solution

Question

Finance

What is the duration of a 2 year bond that pays a 5% annualcoupon with a 9% YTM? Use $1000 as the face value of the bond.Using the duration, what is the expected change in the bond ifrates are expected to drop by 25 basis points?

Answer & Explanation Solved by verified expert
3.6 Ratings (578 Votes)
SolutionThe duration of the bond is 19507 yearsPlease find the attached screenshot of the excel sheetcontaining the detailed calculation for the solutionAs per the information given in the questionThe Duration of the bond 19507 yearsYield to    See Answer
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Transcribed Image Text

What is the duration of a 2 year bond that pays a 5% annualcoupon with a 9% YTM? Use $1000 as the face value of the bond.Using the duration, what is the expected change in the bond ifrates are expected to drop by 25 basis points?

Other questions asked by students

Biology
1.2K views

Recently the amount of carbon in the atmosphere has increased Which of the following human...

Finance
1.2K views

Assume a $95,000 investment and the following cash flows for two alternatives. Year Investment A Investment B 1 $ 35,000 $ 40,000 2 30,000 35,000 3 20,000 25,000 4 20,000 — 5 20,000 — a. Calculate the...

Statistics
1.2K views

Consider the t-distribution with 18 degrees of freedom. Use Table D to find the proportion of...

Basic Math
1.2K views

What are the two limitations of correlation when interpreting the data?

Economics
1.2K views

Enrique lives in rural Ecuador and is finishing his high school. As an outstanding student, he...

General Management
1.2K views

(Word limit: 2000 words). Within the context of the chosen organization, critically discuss the main categories...

Biology
1.2K views

The Latin name Helacyton gartneri was controversially proposed for a new species of what?O a....

Statistics
1.2K views

The table shows the relationship between weight and lifespan for several dog breeds Use DESMOS...

Algebra
1.2K views

10 The expression 3n 11n k can be factored into two linear polynomials with integer...

Accounting
1.2K views

A copyright (\#1) was acquired on January 1, 2019, and has a useful life of...

Accounting
1.2K views

Required information [The following information applies to the questions displayed below.] Cane Company manufactures two...

Accounting
1.2K views

payroll project ch 7I need help calculating the total earnings. I put in the hours...