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Find the duration of the bond

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Reference no: EM131740246

Please show the formular and the work for each question, thank you.

ABC Corp has a 5% coupon bond making annual payments that matures in 4 years.

a) Find the duration of the bond if it has a yield to maturity of 3%.

b) Using the modified duration relationship, find the price of the bond if the yield goes down 75bps.

c) Compared to a zero-coupon bond that has a maturity of 4 years, which bond would change most to a rate change? Explain without using calculations.

Reference no: EM131740246

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