Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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7. Consider a 20 year 7.20% annual coupon
bond whose duration is approx. 11 years
when required rate of return (yield to
maturity) is 7.50%. Prove that this bond is
immunized if you hold it for 11 years.
8. Consider a 10 year 6.50% annual coupon
bond whose duration is 7.50 years when
required rate of return (yield to maturity)
is 6.50%. Prove that this bond is
immunized if you hold it for 7.50 years.
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Transcribed Image Text:7. Consider a 20 year 7.20% annual coupon bond whose duration is approx. 11 years when required rate of return (yield to maturity) is 7.50%. Prove that this bond is immunized if you hold it for 11 years. 8. Consider a 10 year 6.50% annual coupon bond whose duration is 7.50 years when required rate of return (yield to maturity) is 6.50%. Prove that this bond is immunized if you hold it for 7.50 years.
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