Bond pays annual interest

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Reference no: EM131980742

1. A bond pays annual interest. Its coupon rate is 11.2%. Its value at maturity is $1,000. It matures in 4 years. Its yield to maturity is currently 8.2%. The duration of this bond is _______ years.

a) 3.20

b)4.00

c)2.95

d) 3.46

2. A bond currently has a price of $1,050. The yield on the bond is 7%. If the yield increases 21 basis points, the price of the bond will go down to $1,021. The duration of this bond is ____ years.

a) 14.09

b) 13.14

c) 12.26

d) 14.50

Reference no: EM131980742

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