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Business, 12.02.2020 01:12 abelgutierrez370

An insurance company is analyzing the following three bonds, each with five years to maturity, annual coupon payments, and duration as the measure of interest rate risk.

What is the duration of each of the three bonds?

Duration of the Bond
a. $10,000 par value, coupon rate = 8.5%, rb = 0.15 years
b. $10,000 par value, coupon rate = 10.5%, rb = 0.15
c. $10,000 par value, coupon rate = 12.5%, rb = 0.15

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