1. Consider a bond that promises the following cash flows. Year : 0 1 2 3 4 Promised Payments: 150 170 210 260 Assuming all market interest rates are 14%, what is the duration of this bond?
2. Consider a coupon bond that has a $1,000 par value and a coupon rate of 12% The bond is currently selling for $1,280 and has 12 years to maturity. What is the bond’s yield to maturity?