What will be the duration of this bond? and What will be the effect of the changes on the duration of the bond if the coupon rate is 6% rather than 9%?

Section B (2 Mark)

As a CWM you are considering the following bond for inclusion in the fixed income portfolio of your client:

What will be the duration of this bond? and What will be the effect of the changes on the duration of the bond if the coupon rate is 6% rather than 9%?
A . 8 years, Increase
B . 7.33 years, Decrease
C . 6.031 years, Increase
D . 7.012 Years, Decrease

View Answer

Answer: C