Question

A $1,000 bond has three years to maturity and has a coupon rate of 15 percent. Coupon payments are made annually. The bond is currently selling in the market for $1,072 and has a yield-to-maturity of 12%. What is the duration of this bond?

A. 3 years

B. 1 year

C. 1.92 years

D. 2.45 years

E. 2.64 years

Answer

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