Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

14. (Duration limit) Show that the limiting value of duration as maturity is increased to infinity is 1 (Alm) For the bonds in Table 36

image text in transcribedimage text in transcribed

14. (Duration limit) Show that the limiting value of duration as maturity is increased to infinity is 1 (Alm) For the bonds in Table 36 (where 05 and m 2) we obtain D 20.5 Note that for large A this limiting value approaches l/m, and hence the duration for large yields tends to be relatively short

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Engineers Cost Handbook Tools For Managing Project Costs

Authors: Richard E. Westney

1st Edition

0824797965, 978-0824797966

More Books

Students also viewed these Finance questions