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What is the duration of a bond

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Reference no: EM132731183

Question - 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: EM132731183

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