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Calculate the macaulay duration of the bond

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Reference no: EM132722713

Telus 2026, 3.75% annual coupon, non-callable bond has a yield to maturity of 2%.

  1. Calculate the Macaulay duration of the bond. 
  2. Calculate the modified duration of the bond.
  3. Calculate the bond price.
  4. According the modified duration, what is the estimated bond price if the market bond yield
  5. decline by 50 basis points? 
  6. Find the effective duration using 100 basis points change in interest rate.
  7. Hint: 1 basis point is 0.01%.

Reference no: EM132722713

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