dongjohnson
New member
- Jun 18, 2026
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I'm stumped. On this question, how are you supposed to figure out the initial bond price of 96.267? What am I missing?
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Given the following two pairs of price and yield (price, yield): (94.064, 8.3%) and (98.469, 7.7%), the effective duration of the bond is:
A) 4.34.
B) 2.75.
C) 27.53.
D) 7.63.
Your answer: B was incorrect. The correct answer was D) 7.63.
The change in the yield is (8.3-7.7)/2=0.3 or 30 basis points.
Duration = (98.469-94.064)/(2*96.267*0.003) =7.63.
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Given the following two pairs of price and yield (price, yield): (94.064, 8.3%) and (98.469, 7.7%), the effective duration of the bond is:
A) 4.34.
B) 2.75.
C) 27.53.
D) 7.63.
Your answer: B was incorrect. The correct answer was D) 7.63.
The change in the yield is (8.3-7.7)/2=0.3 or 30 basis points.
Duration = (98.469-94.064)/(2*96.267*0.003) =7.63.