Asked by
Katie Salinas
on Dec 08, 2024
Verified
Consider a six yearannual bond paying a 7% coupon, with a yield to maturity of 5.0%. What is the duration of the bond?
A) 4.925
B) 5.148
C) 5.236
D) 5.687
Yield To Maturity
The total return anticipated on a bond if the bond is held until it matures.
Duration
A measure of the sensitivity of the price of a bond or other fixed-income investment to changes in interest rates, typically expressed in years.
- Understand the concept of bond duration and its calculation.
- Evaluate how yield to maturity affects bond duration and prices.
Verified Answer
AV
Learning Objectives
- Understand the concept of bond duration and its calculation.
- Evaluate how yield to maturity affects bond duration and prices.