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What are the yield to maturity

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On 1 July 2020, risk-free Bond A is trading at $100, which matures on 1 July 2025 with the face value of $100 and 10% coupon rate. On the same day, zero-coupon risk-free Bond B is trading at $90, which matures on 1 July 2028 with the face value of $100. Coupon rates and yields to maturity are expressed as an annualized percentage rate compounded semiannually. Coupons are paid semiannually.

-a) What are the yield to maturity, Macaulay duration, and the modified duration of Bond A?

-b) What are the yield to maturity, Macaulay duration, and the modified duration of Bond B?

Reference no: EM132739842

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