Duration of a treasury note

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Problem:

Based on an 18-month, 8 percent (semiannual) coupon Treasury note selling at par.

1. What is the duration of this Treasury note?

a. 1.500 years.
b. 1.371 years.
c. 1.443 years.
d. 2.882 years.
e. 1.234 years.

2. If interest rates increase by 20 basis points (i.e., DR = 20 basis points), use the duration approximation to determine the approximate price change.

a. $0.000.
b. $0.2775 per $100 face value.
c. $2.775 per $100 face value.
d. $0.2672 per $100 face value.
e. $2.672 per $100 face value.

Summary

These short questions is from Finance as well as the questions deal with the duration of a treasury note if the treasury note sells at par at 8% based on 18 months.

Reference no: EM13827743

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