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How is Modified Duration calculated for a Zero Coupon Bond?

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3 years zero coupon bond. face value $100 and present market value $75. What will be its Macualay Duration and Modified Duration?
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What is zero coupon and how is it calculated to maturity?

A zero coupon bond is a bond which pays no interim cashflow (i.e. coupons). We usually price on the basis of percentage of Face Value (i.e. $100). So if you expected 5% return

What is the advantage of buying zero-coupon bonds?

The advantage of buying zero-coupon bonds is that when they reach maturity, the investor then receives the full face value of the bond. These bonds became popular in the 1980

What is so special about Zero Coupon Municipal Bonds?

Zero Coupon Municipal Bonds are special because, unlike other bonds, they have no periodic interest payments. Rather, the investor receives one payment at maturity. This payme

What is a bond coupon?

Most bonds have two parts: the coupons and the corpus. The corpus represents the principal; the coupons the interest. Coupons have redemption dates printed on them; you turn i

How do investors make money on zero-coupon bonds?

The bond sells at a discount from its face value--sometimes a BIG discount. At the date of maturity, the bond will give you the full face value.

What is relationship between a bond coupon rate and its duration?

  bond coupon rates and yield rates have very similar effects and a very similar relationship to duration, lemme explain, by first explain durations effects in relation to

What are zero-coupon debentures or bonds?

    A zero coupon bond pays no interest. Thus the market price for such a bond is always LESS than the maturity (face) value. The amount by which the bond is priced be

Distinguish between deep discount bond and zero coupon bond?

the main difference between deep discount bond and zero coupon bond  is that in case of zero coupon bond no int is payable periodically  while in case of deep discount bond

What is non-zero coupon bonds?

if a bond has finite maturity or limited maturity then we must consider not only the interest rate stream but also the maturity value (face value). regards Sajida Gul

How or where can you cash in a tiger zero coupon bond?

  Go to your local discount broker, (Schwab, Ameritrade, E*trade, Scottrade) open an account and they will cash it in or liquidate it for you. There will be a fee associat

Can you compute the price of a 5-year zero coupon bond from 2 5 year coupon bonds?

Five-Year Zero Coupon     If the 2 5 years are exactly the same with the exception of having coupons (same lender, same claims, same everything) then yes you should b

What is the taxation of zero coupon bonds held to maturity?

Zero coupon bonds issued by the US Treasury are issued at a  discount to face value. An investor holding zero coupon bonds is  paid the full face value when the zero coupon