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Suppose you will go to graduate school for 2 years beginning in year 4. Tuition is $28,359 per year, due at the end of each
Suppose you will go to graduate school for 2 years beginning in year 4. Tuition is $28,359 per year, due at the end of each school year. What is the Macaulay duration (in years) of your grad school tuitions? Assume a flat yield curve of 0.06. Assume annual compounding. In the above description, if you see a flat yield curve of 0.08 for example, then it means that the yield at all maturities is 8%.
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