Question

A two year coupon bond with a yield of 0.13 (continuously compounded) pays an 5.3% coupon...

A two year coupon bond with a yield of 0.13 (continuously compounded) pays an 5.3% coupon at the end of each year. Face value is $1000.  Calculate the duration of the bond.

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Value of Bond =

Where r is the discounting rate of a compounding period i.e. 13%

And n is the no of Compounding periods 2 years

Coupon 5.3%

=

=

= 93.3405073275 + 771.051585801

= $ 864.392093128

Duration of Bond =

=

=

= 1670.37369752 / 864.392093128

= 1.9324

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
A two year coupon bond with a yield of 0.11 (continuously compounded) pays an 4.2% coupon...
A two year coupon bond with a yield of 0.11 (continuously compounded) pays an 4.2% coupon at the end of each year. Face value is $1000.  Calculate the duration of the bond.
A two year coupon bond with a yield of 0.08 (continuously compounded) pays an 8.2% coupon...
A two year coupon bond with a yield of 0.08 (continuously compounded) pays an 8.2% coupon at the end of each year. Face value is $1000. Calculate the duration of the bond.
A 5-year bond with a yield of 7% (continuously compounded) pays an 8% coupon at the...
A 5-year bond with a yield of 7% (continuously compounded) pays an 8% coupon at the end of each year. (a) What is the bond price? (b) What is the bond duration? (c) Use the duration to calculate the effecto on the bond's price of a 0.2% decrease in its yield. (d) Recalculate the bond's price on the basis of a 6.8% per annum yeild and verify that the result is in agreement with your yield.
The yield of a 1-year zero-coupon bond is 5% per annum (continuously compounded). A 2-year coupon...
The yield of a 1-year zero-coupon bond is 5% per annum (continuously compounded). A 2-year coupon bond with a coupon rate of 7% per year (paid annually) has a price of £98 and a yield of 7.81% per annum (continuously compounded). The bonds have principal value of £100. i) What is the forward rate over the 2nd year? Provide the answer as a semi-annually compounded forward rate, as well as a continuously compounded forward rate.
Suppose a 3 year 5% coupon bond has a face value of $1000 and a yield...
Suppose a 3 year 5% coupon bond has a face value of $1000 and a yield of 6%. The coupon payments are annually and the yield is stated in terms of continuously compounding /discounting. I) Determine the price of the bond. II) Determine the duration of the bond.
The one-year continuously-compounded zero rate is 3.5% per annum. The two-year zero rate is 5% per...
The one-year continuously-compounded zero rate is 3.5% per annum. The two-year zero rate is 5% per annum. What is the forward rate for the second year? 4.25% per annum. 6.5% per annum. 7.5% per annum. 8.5% per annum. If the continuously compounded interest rate is 12% per annum, what is the price of a two-year zero-coupon treasury bill with a face value of $100? $76.0 $78.66 79.72 $80.64 The price of a two-year zero coupon bond with a face value...
a. What is the duration of a two-year bond that pays an annual coupon of 10.3...
a. What is the duration of a two-year bond that pays an annual coupon of 10.3 percent and has a current yield to maturity of 12.3 percent? Use $1,000 as the face value. (Do not round intermediate calculations. Round your answer to 4 decimal places. (e.g., 32.1616)) b. What is the duration of a two-year zero-coupon bond that is yielding 11.5 percent? Use $1,000 as the face value. a. Duration years b. Duration years
a. What is the duration of a two-year bond that pays an annual coupon of 11...
a. What is the duration of a two-year bond that pays an annual coupon of 11 percent and has a current yield to maturity of 13.7 percent? Use $1,000 as the face value. (Do not round intermediate calculations. Round your answer to 4 decimal places. (e.g., 32.1616)) (in years) b. What is the duration of a two-year zero-coupon bond that is yielding 11.5 percent? Use $1,000 as the face value. (in years )
a. What is the duration of a two-year bond that pays an annual coupon of 11.2...
a. What is the duration of a two-year bond that pays an annual coupon of 11.2 percent and has a current yield to maturity of 13.2 percent? Use $1,000 as the face value. (Do not round intermediate calculations. Round your answer to 4 decimal places. (e.g., 32.1616)) b. What is the duration of a two-year zero-coupon bond that is yielding 11.5 percent? Use $1,000 as the face value. *please show using financial calculator if possible*
What is the duration of a two-year bond that pays an annual coupon of 11 percent...
What is the duration of a two-year bond that pays an annual coupon of 11 percent and has a current yield to maturity of 13.7 percent? Use $1,000 as the face value. (Do not round intermediate calculations. Round your answer to 4 decimal places. (e.g., 32.1616)) Duration=? years
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT