Consider a $1,000 face value, Treasury bond with a 10 percent semiannual coupon selling at par with a 10 percent yield to maturity.
I) Calculate the duration if the maturity is in five years
J) Calculate the duration if the maturity is in four years
K) Calculate the duration if the maturity is in three years
L) Plot the relationship between maturity (x-axis) and the duration (y-axis). Be sure to label the y-axis, x-axis, and chart title
In your report, identify and comment on the relationship between duration and maturity.