Calculate the duration for a bond that has a maturity


Problem

Consider three Treasury bonds each of which has a 10 percent semiannual coupon and trades at par.

a. Calculate the duration for a bond that has a maturity of four years, three years, and two years.

b. What conclusions can you reach about the relationship between duration and the time to maturity? Plot the relationship.

The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.

 

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Microeconomics: Calculate the duration for a bond that has a maturity
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