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

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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
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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

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