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The current price of a bond is 100. The instantaneous rate of change or derivative of the price of the bond with respect to the
The current price of a bond is 100. The instantaneous rate of change or derivative of the price of the bond with respect to the yield rate is -700. The yield rate is an annual effective rate of 8%.
Calculate the Macaulay duration of the bond. Note: Recall that it is customary to drop the negative when computing volatility or modified duration.
a) 7.00
b) 7.49
c) 7.56
d) 7.69
e) 8.00
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