bo d

loso

boud Must Le

PestVee tlhe
boud, nend dec hease Hhe hegie
Ate (ts Conside y i4 is l4/.

- loo a.322) + loso

Lond
Loud t

YL: owey rate

997.8

me loso
du
Hle calelete (oo isbond
the (2/. is bon
go Tue
hNe Iited bouds The o,
(MMD) Dusetian Macauly Modily 5,
Duyetion
ion. Dusat
There
uteyestates
eltie Dusetion
is
Ytes
est cheny to phieis d's bou
is Tlous
eaSuye
bond's the the llouet
nto tokes also ou te
eye tophiee
wsibivity
boud isk hate
tst
DuRATiod. Bonlo
13-6l
9yo.9 9379-
150 4978- (24 yTM
dilke Ar:
 Go

Calatiou DuYotion B.
Preset yeee

() (a) (3)
2 o893 lo.416

19.128

25. 632
3 12 o712

71-232 294.928
I1a(esti2:12) o3l

loo.os6 340.oy

Boud dusetiou Ttal ol odt

Totl o preseat ele o

Boud duyatiou

Bond duretion 34o2yeavs)

L9, A boud $ los with (27- Coupon date issue
is hedecmable
fYo now
He arket
irest t pheudlig
lu/. Callat bond
is
duradio.
 PAoduet
(a) (3) ()a)x (3)() ()x ()
lo- S24
9-229 (8. us
12 24.3
oS 92

b228 31-14

Clos lotset)

Boudusetio Toteol Poduct

Total

Goud dratiou

bond isis
39,A 12-sl. bond hedeeabe ou ( 2o4
t phewiuha iuteyest
Mas kt
is(S. at wat pAiee wir this
bond May Ket
lso clalte Loud durdion
boud issyeS.
rate
Vele Lond
is
Ate (2-s
. loupou
 n

Ate
alatio boud dwedion

Yers
(1) (3)
lo.925
o.756
8.225 24.67s

23-4
o572

(uterest t mturity 241.95

375303

is
Loud ol al the csl lows
te boud will be tyadel
set
At pr :
Mayket 4.oS

ultiou boud durtion Totol phoduat

Veee

Baud duYtion 375- o3

 Boud dutation 3.9s5 yes/

Paslem Dustetiou

Auelley metleod Meesute

plica
Seusboty Durtio
tevest tel ots

Juration vided by 1+YTM

Tm
Loud
qiven LwitL
Fole vaue Boud=looa
:Lo/.
yTM
Term to

Yeexs
(2) (3)
913 813
o8{3
o.714

3
o.712 2,(30
o.636 636 2,sut
3,9.S
623.7
toofn
3,46t.7 lo, 285.S
Clulio boud rdionTotal ol produt

Baud drtion lo, 285.S

3,4647

Boud duselion
MMD MD

MMD

|4o-[2

MMD

Holaig poiol Rutusn: CApR)

Holdig poriod veturn ts so kuon as
Poid hate yeturn. lis lon
be clelate

Holdig peied Retun pic qeia oss dariy

phie t tue
 we maKe n uestwet boul at

HR loo t loo ylos

o2Xloo

Conlon pay nt tia.

alulite Hpa.
(oao
lass = s t s o
Coupou e elos
-|So t lo& xloo

Oos X loo

-S
 Lol or
2 A investor be
dig
heeves iutoest
peucd at
Corpy
boul is
tLe
?lobs. clule HpR!
Phie |loss =lobo-elobs)=
hate

HpR8t l o X loo
lobo

=o. lo x loo

3 The oe Velue deletuse is loo 4

hde
phie ts
is

loo

X lo o
looo

ooo2 x lo
 Deep ots Caut Badsy
Iu yeced fiencil istiu
Hious Lave issuc! debt iustument
DDB. Tese D
Des
issue phiee
Jal is Poyalle to lu loldey
DDB

Fos eYampe td To81 issued DDB

Seies
DDBSJ wese Mtuse
Metsble tu 25 yrs pom tle
Ate issue t

(terest oy
Wes to t l Lolder bchre
otuity. Siue tuee
isswe a !
paymeat
the Malwiy dte Lesc DDBs ay so
bods.
a be e as
veliti on DDB
Same (ines ALe or di ary bonds
D DB tes
Siuce
Casl lot time

mtty +Le preseut Vale

yul to tle
dis lat
eturn
t
 the DDB. TLe walee
be
He
B. (poo) Fv (14K)
Bo

DDB

Poy-lle

&A DDB is issued dor a mtwity period

+let the
is

boud
(It)

40.1s) 1o
 Bond ile Theahems :
TheoYemm1'
pice
ud ve versa

Fetars Bond A

aturity priot
Meyhet pe
Yild
Even bouds Aeud B ere
Mtrity
aupon t,
to
bond wit Low
Lecause with more e
lessy
Theorem-2 semans the §me
Goud's
discant o prei

Fedors BoudA Boud&

vebue
lo/.
Yicld
DisCont ?s1-2q

wilons A

storttm

boutd's
yell
disco
hemains

at
deccse
lousides bad
velue
Hive
to caet9

Years to PAesunt value

b83-0
7s.3
826.4
1 o1-1

Te bove
dis Cout Yote delies
boud
point
 Preniu bad

heosm
A sisk he Lonts ie tot dectue
boud's is qretey tlen the
fell in the bod's
Hhe yid Teke bond wlL

yield
that
the bond peee oil be

1) (puzrA /,, syys)+loo

lo o X 3 99 4 oco Xor68 ob
(o79-87
iuerses
Loud Le 127.93.

927- 93
yild has Aesutes in
ise o 29.9( but te
t hise
Cause Varialian

Louts
ts
Cogo
the

Factos Boud A BoudB

to/.
Yiel 9°/. 9/.

los.(s Jloo
Face value
Yield 11.
lo2.s3