Bond Y: Par value = $1,000 10 years to maturity 5% coupon bond Bond Z: Par value = $1,000 7 years to maturity 0% coupon
Posted: Sun May 08, 2022 9:56 am
Bond Y:
Par value = $1,000
10 years to maturity
5% coupon bond
Bond Z:
Par value = $1,000
7 years to maturity
0% coupon bond
Given Ben is currently holding $4 million of bond Y, he buys $6
million of bond Z and interest rate is 10%.
Calculate the duration of portfolio.
Par value = $1,000
10 years to maturity
5% coupon bond
Bond Z:
Par value = $1,000
7 years to maturity
0% coupon bond
Given Ben is currently holding $4 million of bond Y, he buys $6
million of bond Z and interest rate is 10%.
Calculate the duration of portfolio.