Consider a five-year, 8 percent annual coupon bond selling at par of $1,000. What is the duration of this bond? Show your work please
YEAR | Cash flows | PVIF at 8% | PV at 8% | PV*Year/1000 |
1 | 80 | 0.92593 | 74.07 | 0.07 |
2 | 80 | 0.85734 | 68.59 | 0.14 |
3 | 80 | 0.79383 | 63.51 | 0.19 |
4 | 80 | 0.73503 | 58.80 | 0.24 |
5 | 1080 | 0.68058 | 735.03 | 3.68 |
1000.00 | 4.31 | |||
Duration = 4.31 years. |
Consider a five-year, 8 percent annual coupon bond selling at par of $1,000. What is the...
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