Consider an investment portfolio consisting of two zero-coupon bonds: a 4-year zero-coupon bond with maturity value 4,000 and a yield of 4% a 7-year zero-coupon bond with maturity value 7,000 and a yield of 7% What is the modified duration of this 2-bond portfolio? All of the interest rates in this problem are annual effective rates.) A) 5.31 B) 5.36 C) 5.46 D) 5.56 E) 5.91

Consider an investment portfolio consisting of two zero-coupon bonds: a 4-year zero-coupon bond with maturity value 4,000 and a yield of 4% a 7-year zero-coupon bond with maturity value 7,000 and a yield of 7% What is the modified duration of this 2-bond portfolio? All of the interest rates in this problem are annual effective rates.) A) 5.31 B) 5.36 C) 5.46 D) 5.56 E) 5.91

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 17P: Bond Value as Maturity Approaches An investor has two bonds in his portfolio. Each bond matures in 4...

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