Question 2 Suppose you had a 6 percent coupon, £1,000 par bond that matures in three years. Assume that the bond’s Yield To Maturity (YTM) is 10 percent and that the interest is paid semi-annually. Calculate this bond’s duration. I need detail answer this question and formula for each answerQuestion 2 You speculate that prices will not move much. You have the following information: Stock Price = Exercise Price = £60Call option = £4Put option = £3 i) What strategy should you adopt? What is the name of your strategy combination? ii) What is the maximum loss? iii) What are the breakeven points of the position?
Calculate this bond’s duration
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