Consider a portfolio of a 1-year zero coupon bond with face value 2,000 and a 10-year zero coupon bond with face value 6,000. The yield on all bonds is 10% per annum (continuous). The duration (in years) of this bond portfolio is (a) 3.25 (b) 5.00 (c) 5.95 (d) 6.20 (e) 7.75
Consider a portfolio of a 1-year zero coupon bond with face value 2,000 and a 10-year zero coupon bond with face value 6,000. The yield on all bonds is 10% per annum (continuous). The duration (in years) of this bond portfolio is (a) 3.25 (b) 5.00 (c) 5.95 (d) 6.20 (e) 7.75
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter4: Bond Valuation
Section: Chapter Questions
Problem 12P: Bond Yields and Rates of Return A 10-year, 12% semiannual coupon bond with a par value of 1,000 may...
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Consider a portfolio of a 1-year zero coupon bond with face value 2,000 and a 10-year zero coupon bond with face value 6,000. The yield on all bonds is 10% per annum (continuous). The duration (in years) of this bond portfolio is (a) 3.25 (b) 5.00 (c) 5.95 (d) 6.20 (e) 7.75
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