What is the duration of an 8 percent annual payment two-year note that currently sells at par?
A)2 years.
B)1.75 years.
C)1.93 years.
D)1.5 years.

Question

Quizplus · Accepted Answer

Macaulay's Duration 11efb86b_1935_279d_9137_0bfe7c74facf_TB1314_00 The duration of a bond selling at par is approximately equal to its maturity when the coupon rate is equal to the yield. For a two-year note with annual payments, the duration is slightly less than the maturity, calculated as 1.93 years.

What Is the Duration of an 8 Percent Annual Payment