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Find the duration of a 6% coupon bond making annual coupon payments if it has three...

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Finance

Find the duration of a 6% coupon bond making annual couponpayments if it has three years until maturity and a yield tomaturity of 10%.

Answer & Explanation Solved by verified expert
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We can take the face value of the bond as 1000 for better calculations Given that the bond pays 6 coupon rate per year Coupon paymentFace valueCoupon rate1000660 Cash flow for year 1 and year 2 will be coupon payments of 60 respectively and in year 3 coupon payment plus an amount equal to the face value of the bond will be paid Cash flows    See Answer
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Find the duration of a 6% coupon bond making annual couponpayments if it has three years until maturity and a yield tomaturity of 10%.

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