A 10-year 8% coupon bond has a yield of 9%. Using annual compounding, what would the...

A 10-year 8% coupon bond has a yield of 9%. Using annual compounding, what would the duration of the bond equal?

Expert Solution

Solution:-

Let Face value of Bond = $1,000

To Calculate Current Price of Bond-

To Calculate Duration of Bond-

Duration of Bond =

Duration of Bond = 5.66 years

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