A 3-year 10% annual coupon bond yields 5%. The dollar price for the face value of $1000 is $1,136.1624. The Macaulay duration of the bond is 2.7525. The Modified Duration of the bond is equal to: years (4 decimals).

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Bond Valuation

Bond valuation are the notes issued by the corporation to raise long-term funds for the business. The corporations are required to pay the interest on such liabilities at a specified rate of interest (termed as coupon rate) at specified dates which may be on semi-annual or annual basis. These interest payments may be in the form of coupons.