In: Finance
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.
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 -