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Bond Yield and Duration

Assume coupons are paid annually. Here are the prices of three bonds with 10-year maturities:

Bond Coupon (%) Price (%)
2 81.62
4 98.39
8 133.42
________________________________________

a. What is the yield to maturity for each bond? (Round to 1 decimal place.)

Bond Coupon (%) YTM
2 %

4 %

8 %

________________________________________

b. Which bond offered the highest yield to maturity?

2% coupon bond

4% coupon bond

8% coupon bond

c. Which bond offered the lowest yield to maturity?

8% coupon bond

2% coupon bond

4% coupon bond

d-1. Which bond had the longest duration?

2% coupon bond

4% coupon bond

8% coupon bond

d-2. Which bond had the shortest duration?

2% coupon bond

4% coupon bond

8% coupon bond

Solution Summary

Excel spreadsheet attached answers multiple questions on bond yield, duration and coupons with calculations visible by selecting cells.

$2.19