An investor buys an 8% annual payment bond with 3 years to maturity. The bond has a yield-to-maturity of 7%. The bond's modified duration is closest to:

Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
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Chapter4: Bond Valuation
Section: Chapter Questions
Problem 14P: Current Yield with Semiannual Payments A bond that matures in 7 years sells for $1,020. The bond has...
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  1. An investor buys an 8% annual payment bond with 3 years to maturity. The bond has a yield-to-maturity of 7%. The bond's modified duration is closest to:

                                                                                                                         

 

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why the 1st yr and 2nd yr, the pv of cash flow are same? what about 4th yr?

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