Zero-coupon bond has maturity

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Reference no: EM132036910

1. A 5 year, zero-coupon bond has a maturity of $1,000 and a present market price of $713. Its duration in years is

(a) 4.7. (b) 5. (c) 4.2. (d) 3.9.

2. A bond has a duration of 8 years and a present yield-to-maturity of 8%. If the yield- to-maturity rises to 10%, the approximate bond price change would be

(a) +7.9%. (b) –25%. (c) –14.8%. (d) –12.9%.

Reference no: EM132036910

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