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Find what is the duration of a bond with a par value

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Problem 1: What is the duration of a bond with a par value of $10,000 that has a coupon rate of 6.5% annually and a final maturity of two years? Assume that the required rate of return is 6% compounded semi-annually. What is the duration of a two-year zero-coupon bond that pays $10,000 at maturity and is priced to yield 6% with semi-annual compounding? Why do the durations differ?

Reference no: EM132685051

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