blog

financial calculation question:

financial calculation question:

What is the duration of a bond with a par value of $10,000 that has a coupon rate of 6.5% annually and a final maturity of two years? Assume that the required rate of return is 6% compounded semi-annually. What is the duration of a two-year zero coupon bond that pays $10,000 at maturity and is priced to yield 6% with semi-annual compounding? Why do the durations differ?

 

Is this the question you were looking for? If so, place your order here to get started!

×