Q15. The FIM bank has issued two bonds, the first bond is a 3-year coupon paying bond with 10% of coupon rate. The second bond is a 30-year zero-coupon bond. The face value for two bonds are $100. Assume the yield curve is flat and the yield to maturity is 10%. Which of the following is correct?   The bond price for the second bond is $5.73, and the duration for the second bond is 29.5 years   The bond price for the first bond is $85.3, and the duration for the first bond is 2.73 years   The bond price for the first bond is $98, and the duration for the first bond is 2.73 years   The bond price for the second bond is $5.73, and the duration for the second bond is 30 years   The bond price for the first bond is $100, and the duration for the first bond is 3 years

EBK CFIN
6th Edition
ISBN:9781337671743
Author:BESLEY
Publisher:BESLEY
Chapter5: The Cost Of Money (interest Rates)
Section: Chapter Questions
Problem 13PROB
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Q15. The FIM bank has issued two bonds, the first bond is a 3-year coupon paying bond with 10% of coupon rate. The second bond is a 30-year zero-coupon bond. The face value for two bonds are $100. Assume the yield curve is flat and the yield to maturity is 10%. Which of the following is correct?

 

The bond price for the second bond is $5.73, and the duration for the second bond is 29.5 years
 
The bond price for the first bond is $85.3, and the duration for the first bond is 2.73 years
 
The bond price for the first bond is $98, and the duration for the first bond is 2.73 years
 
The bond price for the second bond is $5.73, and the duration for the second bond is 30 years
 
The bond price for the first bond is $100, and the duration for the first bond is 3 years
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