Computing Duration? Suppose there is a 15 year, option-free noncallable bond with an annual coupon of 7% trading at par. Compute and interpret the bonds’s duration for a 50 basis point increase and decrease in yield.

Example : Computing durationSuppose there is a 15- year , option – free noncallable bond with an annual coupon of 7%/0trading at par . Compute and interpret the band’s duration for a 50 basis point increaseand decrease in yield.

 

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