Exhibit 18.1
Use the Information Below for the Following Problem(S)
A $1000 par value bond with 5 years to maturity and a 6% coupon has a yield to maturity of 8%. Interest is paid semiannually.
-Refer to Exhibit 18.1.Calculate the modified duration for the bond.
A) 4.19 years
B) 4.36 years
C) 8.72 years
D) 8.38 years
E) 9.52 years

Question

Quizplus · Accepted Answer

Modified duration = 4.36/(1 + .04)= 4.19 years.

Exhibit 18.1 Use the Information Below for the Following Problem(S)