View the step-by-step solution to:

Question

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 = Coupon = YTM = Maturity = annual payments

$1,000 0.0300 0.0230 2



Time Cash Flow PVIF PV of CF PV*CF*V


  1. $________ .9775 $________ $_________


  1. $________ .9555 $_________ $_________

Price = $________ $__________


Duration =___________/ Price = _________ year

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