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Calculate the bond macaulay duration

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Reference no: EM132398368

Lucky Star Inc. just issued a bond with the following characteristics:

Maturity = 3 years

Coupon rate = 8%

Face value = $1,000

YTM = 10%

Interest is paid annually and the bond is noncallable.

  1. Calculate the bond's Macaulay duration (Round "Present value" to 2 decimal places and "Duration" to 4 decimal place.)
  2. Calculate the bond's modified duration
  3. Assuming the bond's YTM goes from 10% to 9.5%, calculate an estimate of the price change without considering convexity.
  4. Calculate the convexity of the bond.

Reference no: EM132398368

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