Calculate the duration at interest rate

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A 10-year 15% coupon bond with a face value of $2000 has cash payments identical to zero coupon bonds of $200 each year.

a. Calculate the duration at 15% interest rate.

b. Calculate the duration when interest rate increase to 20%.

c. What is the effect on the duration of coupon bond when interest rate increased from 15% to 20%.

Note. Present your answer in a tabular form.

Reference no: EM133120354

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