## Bond Duration **Title Edited**

1. Finance Question...Thanks for the help in advance...

We have T-Bonds that have have a 5 year maturity paying 5% coupon semi-annually compounded and selling at par, valued at \$175,000. I am looking for Duration.
I can't figure out if YTM = the 5% b/c they are valued at par or do I need to calculate it?
2. Bump. I guess there are no resident financial gurus in OT. Sigh.
Thread StarterAdd TigerWho to Rail
3. are u given a zero rate yield curve?

4.
##### Originally Posted by Leet8s

are u given a zero rate yield curve?

That's all the info I am given. Also, note that it says when market rate = par value, coupon rate = yield.
Thread StarterAdd TigerWho to Rail
5. well when a coupon bond is priced at par, then the coupon rate has to equal YTM. the way ive always done duration for a coupon paying bond was to be given the zero-rate yield curve and then take each cash flow, multiply each of them by the corresponding dollar duration at each future cash flow (this is based off of a formula using zero rates) and then divide by the sum of the cash flow by the zero-price at each time. Duration = Dollar Duration/Price and you can do this for every bond if you know the yield curve.

I'm sure there is a way to figure this out but sorry i'm way too lazy. look into the weighted value of each cash flow in comparison to total cash flow and price.

6.
##### Originally Posted by Leet8s

well when a coupon bond is priced at par, then the coupon rate has to equal YTM. the way ive always done duration for a coupon paying bond was to be given the zero-rate yield curve and then take each cash flow, multiply each of them by the corresponding dollar duration at each future cash flow (this is based off of a formula using zero rates) and then divide by the sum of the cash flow by the zero-price at each time. Duration = Dollar Duration/Price and you can do this for every bond if you know the yield curve.

I'm sure there is a way to figure this out but sorry i'm way too lazy. look into the weighted value of each cash flow in comparison to total cash flow and price.

TY
Thread StarterAdd TigerWho to Rail
7. All I have to say in response to Leet8s post is ..........

WHAT???????????????

lol I so didn't understand a damn thing you said, but it sounds like you know what you're talking about, so it was nice of you to help the guy out.

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