a bond portfolio consists of the following three fixed-rate bonds. assume annual coupon payments and no accrued interest on the bonds. Prices are per 100 of par value. $$\begin{array} { l r c c c c r }
\text { Bond } & \text { Maturity } & \begin{array} { c }
\text { Market } \
\text { Value }
\end{array} & \text { Price } & \text { Coupon } & \begin{array} { c }
\text { Yield-to- } \
\text { Maturity }
\end{array} & \begin{array} { r }
\text { Modified } \
\text { Duration }
\end{array} \
\hline \text { A } & \text { 6 years } & 170,000 & 85.0000 & 2.00 \% & 4.95 \% & 5.42 \
\text { B } & 10 \text { years } & 120,000 & 80.0000 & 2.40 \% & 4.99 \% & 8.44 \
\text { C } & 15 \text { years } & 100,000 & 100.0000 & 5.00 \% & 5.00 \% & 10.38 \
\hline
\end{array}$$ The bond portfolio's modified duration is closest to:
A) 7.62.
B) 8.08.
C) 8.20.

Question

a bond portfolio consists of the following three fixed-rate bonds. assume annual coupon payments and no accrued interest on the bonds. Prices are per 100 of par value. $$\begin{array} { l r c c c c r } 
\text { Bond } & \text { Maturity } & \begin{array} { c } 
\text { Market } \
\text { Value }
\end{array} & \text { Price } & \text { Coupon } & \begin{array} { c } 
\text { Yield-to- } \
\text { Maturity }
\end{array} & \begin{array} { r } 
\text { Modified } \
\text { Duration }
\end{array} \
\hline \text { A } & \text { 6 years } & 170,000 & 85.0000 & 2.00 \% & 4.95 \% & 5.42 \
\text { B } & 10 \text { years } & 120,000 & 80.0000 & 2.40 \% & 4.99 \% & 8.44 \
\text { C } & 15 \text { years } & 100,000 & 100.0000 & 5.00 \% & 5.00 \% & 10.38 \
\hline
\end{array}$$ The bond portfolio's modified duration is closest to:
A) 7.62.
B) 8.08.
C) 8.20.

Quizplus · Accepted Answer

The Answer of a bond portfolio consists of the following three fixed-rate bonds. assume annual coupon payments and no accrued interest on the bonds. Prices are per 100 of par value. $$\begin{array} { l r c c c c r } 
\text { Bond } & \text { Maturity } & \begin{array} { c } 
\text { Market } \
\text { Value }
\end{array} & \text { Price } & \text { Coupon } & \begin{array} { c } 
\text { Yield-to- } \
\text { Maturity }
\end{array} & \begin{array} { r } 
\text { Modified } \
\text { Duration }
\end{array} \
\hline \text { A } & \text { 6 years } & 170,000 & 85.0000 & 2.00 \% & 4.95 \% & 5.42 \
\text { B } & 10 \text { years } & 120,000 & 80.0000 & 2.40 \% & 4.99 \% & 8.44 \
\text { C } & 15 \text { years } & 100,000 & 100.0000 & 5.00 \% & 5.00 \% & 10.38 \
\hline
\end{array}$$ The bond portfolio's modified duration is closest to:
A) 7.62.
B) 8.08.
C) 8.20.

A Bond Portfolio Consists of the Following Three Fixed-Rate Bonds