Bond duration?

Question

Annual coupon.

Maturity: 20 yrs

Coupon: 10%

YTM: 10%

Par: $1000

Price: $1000

I have:

(20-(100/(1000*.1))(20-(1.1)((1-(1.1)^... = 9.36492009

Is that correct? thank you

Answer 1

In general approach is right - but the problem is some small errors which gives deviation. Also you should specify type of duration - there are two or three of them

Method 1 =9.36

Method 2 =9.24

Some methods and formulas are described here:

http://www.hpmuseum.org/cgi-sys/cgiwrap/...

http://www.investopedia.com/university/a...

http://ezinearticles.com/?Bond-Duration-...

http://www.hpmuseum.org/cgi-sys/cgiwrap/...

http://en.wikipedia.org/wiki/Bond_durati...

Answer 2

this ended up in social science, try reposting in an economics forum.  It probably thought you meant bond like maternal bonding duration.