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Use Excel or similar for this exercise. Consider a 30 year bond paying 3 percent coupons...

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Finance

Use Excel or similar for this exercise.
Consider a 30 year bond paying 3 percent coupons semi-annually anda yield-to-maturity equal to 5 percent. Find the price andduration.
Try a few different coupon rates and see how the price and durationchange. Make a graph with duration on the y-axis and coupon rate onthe x-axis.
Now vary the ytm instead and graph duration against ytm. Also graphduration against par, and duration against T.

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Transcribed Image Text

Use Excel or similar for this exercise.Consider a 30 year bond paying 3 percent coupons semi-annually anda yield-to-maturity equal to 5 percent. Find the price andduration.Try a few different coupon rates and see how the price and durationchange. Make a graph with duration on the y-axis and coupon rate onthe x-axis.Now vary the ytm instead and graph duration against ytm. Also graphduration against par, and duration against T.

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