A particular bond has just been issued and pays coupons of 10% per annum paid half yearly in arrears and is redeemed at par after 10 years. Find the duration of the bond in years, at a rate of interest of 5% per half year effective.
assume for 100
dmt= D(Ia)n+r*n*v^n/(Da(n)+rvn)
if working in half year.
then d=5
and r=50
m i correct?
Last edited by a moderator: Apr 16, 2014
