Question
An investor owns two bonds. He owns $30,000 of a bond which matures in 10 years and has a Macaulay Duration of 8 years. He
An investor owns two bonds. He owns $30,000 of a bond which matures in 10 years and has a Macaulay Duration of 8 years. He also owns $20,000 of another bond which matures in 4 years and has a Macaulay Duration of 3 years.
Compute the Macaulay Duration of the bond portfolio in total.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
To compute the Macaulay Duration of a bond portfolio you can use the weighted average of the Macaula...
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Calculus
Authors: Ron Larson, Bruce H. Edwards
10th Edition
1285057090, 978-1285057095
