UOM Exxon Mobil Corp & Caterpillar Inc Bond Duration & Investments Worksheet

I’m stuck on a Finance question and need an explanation.

For the two part question below please show all workings and attach all references used to answer questions. The text book Petitt, B., Pinto, J., & Pirie, W. (2019). Fixed income analysis” href=”https://ashford.instructure.com/courses/87392/modules/items/4417760″ target=”_blank” rel=”noopener”>Fixed income analysis (4th ed.)” can be used as an option with this information being located in chapter 5.

Part A

for the bond listed above please provide the following:

• Calculate and explain the Macaulay duration of the bond.
• Calculate and explain the modified duration of the bond.
• Show your calculations.

Part B

For the bond listed assume you are a buy and hold investor in the bond. Calculate and show the realized rate of return for this bond. Assume the coupons are reinvested at the same rate of interest as the yield-to-maturity. Provide the following:

• The components of the return.
• The present value (PV) of the reinvested coupons.
• The total return.