Question

Find the duration of a 4.0% coupon bond making semiannually coupon payments if it has three years until maturity and has a yield to maturity of 6.0%. What is the duration if the yield to maturity is 8.0%? Note: The face value of the bond is $100. (Do not round intermediate calculations. Round your answers to 4 decimal places.) 6% YTM 8% YTM 2.8827 X 2.8792 X Years Years

Answer 1

SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

- 2x Find & Select GY GW ke - Microsoft Excel (Product Activation Failed) File Home Insert Page Layout Formulas Data Review View Add-Ins % Cut Σ AutoSum : A Calibri -11AA = = = Dr Wrap Text General Ea Copy Fill Paste BI U D- DA SF Merge Merge & Center - Center $ Format Painter % % , 4:0 .00 :.: Conditional Format Cell Insert Delete Format Sort & Formatting as Table Styles 2 Clear Filter Clipboard Font Alignment CD Number Styles Cells Editing GN16 GL GM GN GO GP GQ GR GS GT GU 6% YTM A B C= ABD D*P TIME UNTIL PAYMENT PV FACTOR PV OF PMT DURATION PAYMENTS AT = 6%/2 =3% WEIGHT YEARS 2 0.9709 1.9417 0.0205 0.0205 2 0.9426 1.8852 0.0199 0.0399 2 0.9151 1.8303 0.0194 0.0581 0.8885 1.7770 0.0188 0.0751 0.8626 1.7252 0.0182 0.0912 102 0.8375 85.4234 0.9032 5.4190 94.5828 1.0000 5.7038 PRICE DURATION 2.8519 14 [5.7038/2] 15 16 17 18 2 10 11 12 13 19 N convexity DGM betaport future INDEX INTL CAP BUD LEASING PV, FV, ANNUITY DIR right clean YIELD bond portfolio HO Rea KE CAPM UTILITY, SHARPE, beta ferences: BB116 cap stru WACC BOJ 130% RESI el - 0 D O 9 * 10 ENG 24-11-2019

- 2x Σ AutoSum : A Fill 2 Sort & m Find & Insert Delete Format Cell Styles 2 Clear Filter Editing Select Cells GS GT GU GY GW 24 ke - Microsoft Excel (Product Activation Failed) File Home Insert Page Layout Formulas Data Review View Add-Ins % Cut Calibri 11 A A = = = V Wrap Text General E Copy Paste BI U D- DA E E E s FMerce Merge & Center - Center Format Painter $ % % , 4.0 .00 :.: Conditional Format Formatting as Table Clipboard Font Alignment Number Styles GP39 GL GM GN GO GP GQ GR 22 8% YTM 23 C=A*B D*P TIME UNTIL PAYMENT PV FACTOR PV OF PMT DURATION PAYMENTS AT = 8%/2 =4% WEIGHT YEARS 26 0.9615 1.9231 0.0215 0.9246 1.8491 0.0207 28 0.8890 1.7780 0.0199 29 0.8548 1.7096 0.0191 30 2 0.8219 1.6439 0.0184 31 102 0.7903 80.6121 0.9005 32 89.5157 1.0000 PRICE DURATION [5.6938/2] 27 2 0.0215 0.0413 0.0596 0.0764 0.0918 5.4032 5.6938 33 34 2.8469 35 36 37 38 39 6% YTM 8% YTM 2.8519 2.8469 K M convexity DGM betaport future INDEX INTL CAP BUD LEASING PV, FV, ANNUITY DIR right KE CAPM UTILITY, SHARPE, beta ferences: P33 clean YIELD bond portfolio cap stru WACC BOI 130% ... B 9 . * . 40 RESI el 20- Red ENG 24-11-2019