POW #6: Duration Exercise You are evaluating an investment in an annual bond with exactly four years to maturity. The bond’s coupon rate is 10% and the bonds current YTM is 13%. 1. Calculate the bond’s Macaulay duration and modified duration. 754.807/1000 0.75481 2. How would you explain the concept of duration to an inexperienced investor? What factors influence duration?
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This note was uploaded on 11/16/2011 for the course BUS M 301 taught by Professor Jimbrau during the Summer '11 term at BYU.