a. What is the duration of a two-year bond that pays an annual coupon of 11.5 percent and has a current yield to maturity of 13.5 percent? Use $1,000 as the face value. (Do not round intermediate calculations. Round your answer to 4 decimal places. (e.g., 32.1616))

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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a. What is the duration of a two-year bond that pays an annual coupon of 11.5
percent and has a current yield to maturity of 13.5 percent? Use $1,000 as the
face value. (Do not round intermediate calculations. Round your answer to 4
decimal places. (e.g., 32.1616))
b. What is the duration of a two-year zero-coupon bond that is yielding 11.5
percent? Use $1,000 as the face value.
a. Duration
b. Duration
years
years
Transcribed Image Text:a. What is the duration of a two-year bond that pays an annual coupon of 11.5 percent and has a current yield to maturity of 13.5 percent? Use $1,000 as the face value. (Do not round intermediate calculations. Round your answer to 4 decimal places. (e.g., 32.1616)) b. What is the duration of a two-year zero-coupon bond that is yielding 11.5 percent? Use $1,000 as the face value. a. Duration b. Duration years years
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