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A bond has a yield to maturity of 5 percent. It matures in 13 years. Its...

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Finance

A bond has a yield to maturity of 5 percent. It matures in 13years. Its coupon rate is 5 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
3.7 Ratings (456 Votes)
Step1 Calculation of Macaulay Duration of the Bond Semiannual Period 1 Cash Flow 2 Present Value Factor T 250 3 Present Value 4 3 x 2 Weight to total 5 Duration 6 1 x 5 050 25 097561 2439 00244 00122 100 25 095181 2380 00238 00238 150 25 092860 2321 00232    See Answer
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A bond has a yield to maturity of 5 percent. It matures in 13years. Its coupon rate is 5 percent. What is its modifiedduration?  The bond pays coupons twice a year.(Do not round intermediate calculations. Enter your answersrounded to 2 decimal places.)

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