Suppose a two-year 9% p.a.bond with a face value of $100 000 has a yield of 8% p.a.What is the Macaulay duration measure of this bond?

A) $ 1.876 $ years:
B) $ 1.890 $ years
C) $ 2.017 $ years:
D) $ 2.401 $ years

Question

Suppose a two-year 9% p.a.bond with a face value of $100 000 has a yield of 8% p.a.What is the Macaulay duration measure of this bond?

A) $ 1.876 $ years:
B) $ 1.890 $ years
C) $ 2.017 $ years:
D) $ 2.401 $ years

Quizplus · Accepted Answer

According to equation 6.8,we can calculate the Macaulay duration as follows: D = [0.5 F1F1F1S1F1F1F10 4326.92 + 1 F1F1F1S1F1F1F10 4160.50 + 1.5 F1F1F1S1F1F1F10 4000.48 + 2 F1F1F1S1F1F1F10 89327.04]/101814.95 = 1.876 years.

Suppose a Two-Year 9% P 1.876 1.876 1.876 Years: B) 1.890 1.890 1.890

Suppose a Two-Year 9% P $1.876$ Years:
B) $1.890$