A portfolio consists of the following two investments a bond with face value of $100 00 paying annual coupons of 10 maturing in 5 years an annuity with payments of $55 00 at the end of each year for 5 years The portfolio is comprised of 49 bonds and 51 annuities The term structure is flat and the c...

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A portfolio consists of the following two investments: a bond with face value of $100.00 paying annual

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A portfolio consists of the following two investments:

a bond with face value of $100.00 paying annual coupons of 10% maturing in 5 years
an annuity with payments of $55.00 at the end of each year for 5 years

The portfolio is comprised of 49% bonds and 51% annuities.

The term structure is flat and the current yield is6% paeffective.

Calculate the duration (D) of the portfolio. Give your answer to 2 decimal places.

Posted Date: Jun 09, 2024 05:07 PM

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A portfolio consists of the following two investments: a bond with face value of $100.00 paying annual

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