A bond currently sells for $1,070, which gives it a yield to maturity of 6%. Suppose...
A bond currently sells for $1,070, which gives it a yield to maturity of 6%. Suppose that if the yield increases by 25 basis points, the price of the bond falls to $1,045. What is the duration of this bond? (Do not round intermediate calculations. Round your answer to 4 decimal places.)
Homework Answers
Change in Bond Price = -Duration * Change in Yield * Bond Price
$1,045 - $1,070 = -Duration * (0.25%) * $1,070
-$25 = -Duration * $2.675
Duration = $25 / $2.675 = 9.3458
Add Answer to:
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