What is the duration of the bond

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You have a 5-year $1000 bond with yield-to-maturity of 10% and a coupon rate of10%.a.What is the duration of this bond? (Assume annual coupon payments andcompounding.)b.If the interest rateincreases by 50 basis points (1/2 percent) to 10.5%, by howmuch will the price of the bond change based on duration rule?c.Assume the coupon rate for the bond in part (a) is 20% rather than 10%, what isthe duration of the bond now? If the interest rate increases by 50 basis points,by how much will the price of the bond change based on duration rule?d.If the term to maturity for the bond in part (a) is 10 years instead of 5 years,what is the duration of the bond? If the interest rate increases by 50 basispoints, by how much will the price of the bond change based on duration rule?e.If the yield-to-maturity for the bond in part (a) is 15% instead of 10%, what is theduration of the bond? If the interest rate increases by 50 basis points, by howmuch willthe price of the bond change based on duration rule?

Reference no: EM133120231

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