What is the duration of a bond with a coupon of 5%, paid semi-annually and a face value of $100. The current market interest rate (which will equal the bond's yield to maturity) is 4%. The bond has a five-year maturity. What is the bond's duration in years? Round your answer to one decimal place.

Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter4: Bond Valuation
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What is the duration of a bond with a coupon of 5%, paid semi-annually and a face value of S100. The current market interest rate (which will equal the bond's yield to maturity) is 4%. The bond has a five-year maturity. What is the bond's duration in
years? Round your answer to one decimal place.
Transcribed Image Text:What is the duration of a bond with a coupon of 5%, paid semi-annually and a face value of S100. The current market interest rate (which will equal the bond's yield to maturity) is 4%. The bond has a five-year maturity. What is the bond's duration in years? Round your answer to one decimal place.
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