The following information is available of a state government bond: Face value: ₹ 100 Coupon rate: 12 percent payable annually Years to maturity: 6 Current market price: ₹ 110 What is the duration of the Bond? Use the app

The yield to maturity, using the approximate formula, is: YTM = [Annual Coupon Payment + (Face Value - Current Price) / Year to Maturity] / [(Face Value + Current Price) / 2] YTM = [12 + (100 - 110) / 6] / [(100 + 110) / 2] YTM = [12 - 1.67] / [105] YTM = 10.33 / 105 YTM = 0.0984 = 9.84% say 10% The duration is calculated below: Year Cash Flow Present Value at 10% Present Value Proportion of the bond's value Proportion of the bond's value x time 1 12 0.909 10.91 0.100 0.100 2 12 0.826 9.91 0.091 0.182 3 12 0.751 9.01 0.083 0.249 4 12 0.683 8.20 0.075 0.300 5 12 0.621 7.45 0.069 0.345 6 112 0.564 63.17 0.581 3.486 108.65 4.662 Years