View the step-by-step solution to:

Question

Can you explain this?

question 8.png

question 8.png

(10 Points)
What is the duration of a two-year maturity, $1,000 Treasury bond with a 3 percent
annual coupon (interest) rate, paid annually with a YTM of 2.30 percent? Assume that
interest is paid annually. US Treasury rates may be found at:
https://www.treasury.gov/resource-center/data-chart-center/interest-rates pages/textview.aspx?data=yield
Two-year Treasury Bond
Par value = $1,000
Coupon = 0.0300
annual payments
YTM = 0.0230
Maturity = 2
Time Cash Flow
PVIF
PV of CE
PV*CF*T
S
0.9775
S
N
S
0.9555
Price =
S
Duration =
Price
=
year's

Recently Asked Questions

Why Join Course Hero?

Course Hero has all the homework and study help you need to succeed! We’ve got course-specific notes, study guides, and practice tests along with expert tutors.

  • -

    Study Documents

    Find the best study resources around, tagged to your specific courses. Share your own to gain free Course Hero access.

    Browse Documents
  • -

    Question & Answers

    Get one-on-one homework help from our expert tutors—available online 24/7. Ask your own questions or browse existing Q&A threads. Satisfaction guaranteed!

    Ask a Question
Ask Expert Tutors You can ask You can ask ( soon) You can ask (will expire )
Answers in as fast as 15 minutes