Consider uhe following newly issued bonus.InputsTagliaferro Incorporated 10 Year BondSettlement Date1/1/2020Rigsby and Pelt Corporation 5 Year Note1/1/2020Maturity Date1/1/20301/1/2025Coupon Rate9.28%4.27%Coupons per Year22Market DataYield to Maturity7.97%Risk-Free Rate1.25%Required:Note: Use cells A2 to B12 from the given information to complete this question.Using any necessary data above, calculate the Macaulay Duration of each bond. Then, use the MacaulayDuration to solve for the Modified Duration.Tagliaferro Incorporated 10 Year BondRigsby and Pelt Corporation 5 Year NoteMacaulay DurationModified Duration

Duration of bond shows the weighted period required to recover all cash flows from the bond and that…

Inputs Tagliaferro Incorporated 10 Year Bond Rigsby and Pelt Corporation 5 Yea Settlement Date 1/1/2020 Maturity Date 1/1/2030 Coupon Rate 9.28% Coupons per Year 2 Market Data Wield to Maturity 7.97% Risk-Free Rate 1.25% Required:

Inputs Tagliaferro Incorporated 10 Year Bond Rigsby and Pelt Corporation 5 Yea Settlement Date 1/1/2020 Maturity Date 1/1/2030 Coupon Rate 9.28% Coupons per Year 2 Market Data Wield to Maturity 7.97% Risk-Free Rate 1.25% Required:

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter6: Fixed-income Securities: Characteristics And Valuation

Section: Chapter Questions

Problem 7P

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Question

Consider uhe following newly issued bonus.
Inputs
Tagliaferro Incorporated 10 Year Bond
Settlement Date
1/1/2020
Rigsby and Pelt Corporation 5 Year Note
1/1/2020
Maturity Date
1/1/2030
1/1/2025
Coupon Rate
9.28%
4.27%
Coupons per Year
2
2
Market Data
Yield to Maturity
7.97%
Risk-Free Rate
1.25%
Required:
Note: Use cells A2 to B12 from the given information to complete this question.
Using any necessary data above, calculate the Macaulay Duration of each bond. Then, use the Macaulay
Duration to solve for the Modified Duration.
Tagliaferro Incorporated 10 Year Bond
Rigsby and Pelt Corporation 5 Year Note
Macaulay Duration
Modified Duration

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