Compute macaulays duration md in years and modified


Three years ago, XYZ Inc. issued bonds with a maturity period of 15 years. The coupon payments are made on a semi-annual basis and the coupon rate is 6%. The current price of the bond is $1125.74. The bonds have a face value of $1000. Compute Macaulay’s Duration (MD in years) and Modified Duration (D* in years), using the Present Value of Cash Flow method as demonstrated in class. Verify your answer using the DURATION and MDURATION functions in Excel.

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Financial Management: Compute macaulays duration md in years and modified
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