Zero Coupon Bond Modified Duration Calculator
Introduction & Importance
Zero coupon bonds are a type of bond that does not pay interest, but rather is sold at a discount to its face value. The modified duration is a measure of the bond’s sensitivity to interest rate changes. Calculating the modified duration of a zero coupon bond is crucial for managing investment portfolios and understanding the bond’s risk.
How to Use This Calculator
- Enter the face value of the bond.
- Enter the discount rate.
- Enter the maturity date of the bond.
- Click the “Calculate” button.