Fill This Form To Receive Instant Help
Fill This Form To Receive Instant Help
Homework answers / question archive / A three-year bond has a par value of $100, a coupon rate of 7% and a yield to maturity of 5%
A three-year bond has a par value of $100, a coupon rate of 7% and a yield to maturity of 5%. All coupons are paid annually. A five year zero coupon bond is also available with a yield to maturity of 6% and par value of $1,000.
a. Calculate the duration of the bond.
b. Suppose you wish to create a portfolio worth $1,000,000 and with a duration of 4 years, consisting of the three-year coupon bond and the five-year zero-coupon bond. How much money should be invested in each type of bond?
Please use this google drive link to download the answer file.
https://drive.google.com/file/d/1RuXvlA37m8OVoU9NJYj-urZ_GXStJYgN/view?usp=sharing
Note: If you have any trouble in viewing/downloading the answer from the given link, please use this below guide to understand the whole process.
https://helpinhomework.org/blog/how-to-obtain-answer-through-google-drive-link
