A bond has 11 years left to maturity, pays coupons semiannually, is priced at 109.2 per...

Question

Question

A bond has 11 years left to maturity, pays coupons semiannually, is priced at 109.2 per $100 of par value, and has a modified duration of 7.07. What is the bond's money duration?

Answer 1

Answer #1

Price of bond per $100 par value = $109.2

Modified duration of bond = 7.07

We know that

Money duration of bond = Modified duration x Price of bond = 7.07 x 109.2 = 772.044

Hence Money duration of bond = $772.044

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Answer 2

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