Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. a bond with a coupon rate of 7 percent sells at a

A bond with a coupon rate of 7 percent sells at a yield to maturity of...

80.2K

Verified Solution

Question

Finance

A bond with a coupon rate of 7 percent sells at a yield tomaturity of 9 percent. If the bond matures in 12 years, what is theMacaulay duration of the bond? What is the modified duration? (Donot round intermediate calculations. Round your answers to 3decimal places.)

Duration
Macaulayyears
Modifiedyears

Answer & Explanation Solved by verified expert
4.4 Ratings (933 Votes)
aMacaulay Duration of the Bond Period 1 Cash Flow 2 Present Value Factor at 9 3 Present Value 4 3 x 2 Weight 5 Duration 6 1 x 5 1 70 091743 6422 00750 0075 2 70 084168 5892 00688 0138 3 70 077218 5405 00631 0189 4 70    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

A bond with a coupon rate of 7 percent sells at a yield tomaturity of 9 percent. If the bond matures in 12 years, what is theMacaulay duration of the bond? What is the modified duration? (Donot round intermediate calculations. Round your answers to 3decimal places.)DurationMacaulayyearsModifiedyears

Other questions asked by students

Q

6.3.8. Problem. Let f : A → B be a continuous bijection between subsets of R. (a)...

Advance Math
Q

Assume that military aircraft use ejection seats designed for men weighing between 149.6149.6 lb and 212212 lb. If​ women's weights...

Statistics
Q

For this Variation of parameter problem, consider the following method of solving the general linear equation...

Advance Math
Q

When do the centers of gravity and mass coincide? When they don’t? Explain why is the...

Physics
Q

5 Walking between sprints is an example of resting O A passively O B actively...

Biology
Q

In the figure shown below there is a wire carrying current to the right What...

Physics
Q

Use synthetic division to find the result when 2x-9x - 16x-2 is divided by x...

Basic Math
Q

The treasurer of Landowska Co. has heard that conservatism is adoctrine that is followed in...

Accounting
Q

Assignment 1 Directions: Use the Needs Approach mentioned in chapter 4 to determine the life...

Accounting
Q

Sandhill Co0 is building a new hockey arena at a cost of $2,310,000. It received...

Accounting
Q

Troy Engines, Ltd., manufactures a variety of engines for use in heavy equipment. The company...

Accounting
Q

Forensic accounting ...

Accounting