Question

A bond pays annual interest. Its coupon rate is 8.5%. Its value at maturity is $1,000. It matures in 4 years. Its yield to maturity is currently 5.5%. The duration of this bond is _______ years. Multiple Choice 4.00 3.39 3.58 3.17

Answer 1

4.00

Step-by-step explanation:

The duration of the bond is the length of time that it takes for the coupons and the price of bond to reach the value of the bond that is the bond maturity.