Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Consider a contract that pays out $183 in 6 months, $102 in 12 months, $92 in 18 months, $21 in 2 years. What is this
Consider a contract that pays out $183 in 6 months, $102 in 12 months, $92 in 18 months, $21 in 2 years. What is this contract's Macaulay duration (in years)? Assume this contract is currently trading at a yield of 3%.
Round your answer to 3 decimal places. For example if your answer is 5.5175, then please write down 5.518.
Hint: First price this contract, and then calculate its duration accordingly.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started