Calculate the duration of the original bond

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1. A 4-year bond with a 3.5% (annual) coupon is at par. Calculate its duration.

2. Increase the coupon to 5%. Recalculate duration.

3. Back to the original 3.5% coupon. But lengthen maturity to 5 years and recalculate.

4. Calculate the duration of the original bond if its yield-to-maturity increases to 4.5%.

5. Back to the original par case. What is duration if it pays semi-annually?

6. What if it pays annually, but amortizes 50% at the end of year 3?

Reference no: EM132826061

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