Question

An Apple annual coupon bond has a coupon rate of 3.4%, face value of $1,000, and 4 years to maturity. If its yield to maturity is 3.4%, what is its Modified Duration? Answer in years, rounded to three decimal places.

Answer 1

N Cash floco I Pv@yfm = 3-40%. I weight I weight & M 34 32.882 T 0033 03.3 1-034 34 032 - 31.gol 34 31. 0032 X 2 = 064 1.032 031 031 X 3 = .093 34 - 30.755 I-033 m .905 905x4 = 3.620 1034 904-562 1034 1:0944 1000 duration = .033t.o64 +.093 +30620 Macaulay 3.810 years Modified duration - 3-810 It ytm = 3.810 1034 3.685 =