What is the bond price and what is the bond duration

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A 5-year bond with a yield of 7% (continuously compounded) pays an 8% coupon at the end of each year. (a) What is the bond price? (b) What is the bond duration? (c) Use the duration to calculate the effecto on the bond's price of a 0.2% decrease in its yield. (d) Recalculate the bond's price on the basis of a 6.8% per annum yeild and verify that the result is in agreement with your yield.

Reference no: EM131957199

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