What is the duration of a 2-year bond that pays a coupon of 8% per annum...

What is the duration of a 2-year bond that pays a coupon of 8% per annum semiannually? It has a face value of $100. The yield on the bond is 10% per annum with continuous compounding.

Solutions

Expert Solution

where,

i = Yield to maturity

t = period

CF = Cash Flow

PVF = Present value Factor.

Please refer to below spreadsheet for calculation and answer. Cell reference also provided.

Cell reference -

jeff jeffy answered 2 hours ago

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