Question: A six-year, $10,000 CD pays 6 percent interest annually. What is the duration of the CD? What would be the duration if interest were paid

A six-year, $10,000 CD pays 6 percent interest annually. What is the duration of the CD?

What would be the duration if interest were paid semiannually? What is the relationship of duration to the relative frequency of interest payments?

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To solve this problem we will calculate the duration of the certificate of deposit CD under two scenarios annual interest payments and semiannual inte... View full answer

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