What are the cash flows generated at the end of five years 1,000 bond if interest rates 5%? What is the reinvestment income at the end of five years 1,000 bond if interest rates 5%? Suppose that the...


What are the cash flows generated at the end of five<br>years 1,000 bond if interest rates 5%?<br>What is the reinvestment income at the end of five<br>years 1,000 bond if interest rates 5%?<br>Suppose that the yield curve implies R = 1%<br>annually. Then the duration of the Consol bond<br>would be<br>Suppose the annual coupon is 8.5%, the face value<br>of the three years bond is $1,000, and the current<br>yield to maturity (R) is also 8.5%. Compute the<br>duration of the bond?<br>

Extracted text: What are the cash flows generated at the end of five years 1,000 bond if interest rates 5%? What is the reinvestment income at the end of five years 1,000 bond if interest rates 5%? Suppose that the yield curve implies R = 1% annually. Then the duration of the Consol bond would be Suppose the annual coupon is 8.5%, the face value of the three years bond is $1,000, and the current yield to maturity (R) is also 8.5%. Compute the duration of the bond?

Jun 08, 2022
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