You intend to purchase a 1-year, $1,000 face value bond. Coupon rate of this bond is 24%. Market interest rate is 18 percent. Coupon payments are semiannual, what is the duration of the bond? (Answer is rounded)

You intend to purchase a 1-year, $1,000 face value bond. Coupon rate of this bond is 24%. Market interest rate is 18 percent. Coupon payments are semiannual, what is the duration of the bond? (Answer is rounded)

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Question

H5.

Please show all step by step calculation

hs
You intend to purchase a 1-year, $1,000 face value bond. Coupon
rate of this bond is 24%. Market interest rate is 18 percent.
Coupon payments are semiannual, what is the duration of the
bond? (Answer is rounded)
O
O
O
O
O
1.90
1.94
1.97
1.99
2.13

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Step 2: Calculating Present value cashflows from the bond.

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