What will be the cash flows at the end of six months

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A one-year, $100,000 bond carries a coupon rate of 12% and a market interest rate of 12%.ent. The bond requires payment of accrued interest and one-half of the principal at the end of six months. The remaining principal and interest are due at the end of the year.

a. What will be the cash flows at the end of six months and at the end of the year?

b. What is the present value of each cash flow discounted at the market rate? What is the total present value?

c. What proportion of the total present value of cash flows occurs at the end of six months? What proportion occurs at the end of the year?

d. What is the duration of this bond?

Reference no: EM131450508

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