What is the present value of bond that matures in 2 years

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What's the present value of a $1,000 bond that matures in 2 years and pays coupons at the rate of 2% per eyar> ( one coupon every 6 months) Assume that the risk free interest rate is 3% throughout the 3 year period.

a)Show your work and calculate the PV, the duration of the bond, DV01.

b)Use the Duration to estimate the change in PV for this bond if the risk free interest rate rises from 3% to 3.2%

Reference no: EM13327789

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