A bond with a coupon rate of 9 percent sells at a yield to maturity of...
A bond with a coupon rate of 9 percent sells at a yield to maturity of 10 percent. If the bond matures in 11 years, what is the Macaulay duration of the bond? What is the modified duration? (Do not round intermediate calculations. Round your answers to 3 decimal places.)
Homework Answers
where,
PV(Ct) = Ct/(1 + YTM)t
Macaulay's Duration = 7.289 years
Modified Duration = Macaulay's Duration/(1 + YTM)
Modified Duration = 7.289/(1.10)
Modified Duration = 6.627 years
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