Consider a bond with a face value of $1,000, an annual coupon rate of 6 percent, a yield to maturity of 8 percent, and 10 years to maturity. This bond's duration is

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Quizplus · Accepted Answer

To calculate the duration of the bond, we need to use the formula for weighted average of times until each payment (coupon and face value) is received, weighted by the present value of that payment. Using this formula, we get the duration for this bond as 7.6 years.

Consider a Bond with a Face Value of $1,000, an Annual