A 10-year 15% coupon bond with a face value of $2000 has cash payments identical to zero coupon bonds of $200 each year.

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answerhappygod
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A 10-year 15% coupon bond with a face value of $2000 has cash payments identical to zero coupon bonds of $200 each year.

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A 10-year 15% coupon bond with a face value of $2000 has cash
payments identical to zero coupon bonds of $200 each year.
a. Calculate the duration at 15% interest rate.
b. Calculate the duration when interest rate increase to
20%.
c. What is the effect on the duration of coupon bond when
interest rate increased from 15% to 20%.
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