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Calculate the Modified duration of Bond Z

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Reference no: EM133009123

Question - There are the following government bonds available in the market: Bond A is a 4-year zero-coupon bond, Bond B is a 10-year zero-coupon bond, and Bond Z is a 4-year 10% coupon bond making annual coupon payments. All bonds are with a face value of $1,000. The current yield to maturity is 8% p.a. for all maturities (i.e., a flat term structure). Calculate the Modified duration of Bond Z.

Reference no: EM133009123

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