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Why do the durations differ

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What is the duration of a bond with a par value of $ 10,000 that has a coupon rate of 3.5 percent annually and a final maturity of two years? Assume that the required rate of return is 4 percent compounded semiannually. What is the duration of a two- year zero coupon bond that pays $ 10,000 at maturity and is priced to yield 4 percent with semiannual compounding? Why do the durations differ?

Reference no: EM13887115

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