Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Sep 08, 2024

What is the duration of a two-year bond that pays an annual coupon of 3 percent and has a current yield to maturity of 6

What is the duration of a two-year bond that pays an annual coupon of 3 percent and has a current yield to maturity of 6 percent? Use $1,000 as the face value. Round your calculations/answers to two decimals. Hint 1: Step 1. McDUR = (1 + y)PVIFAny Step 2: McDUR =n-[n-McDURPa] Hint 2: McDUR = PV(cash flows weighted by year of receipt) / PV(cash flows) 1.93 years O 1.97 years O 1.95 years O 1.99 years O 1.91 years

Step by Step Solution

There are 3 Steps involved in it

Step: 1

Get Instant Access with AI-Powered 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

Students also viewed these Finance questions

Question

1. How might imagery be used to help a fumble-prone running back in football? Devise a plan for accomplishing this goal.

Answered: 1 week ago

Question

★★★★★

The following are frequently performed audit procedures for the verification of bonds payable issued in previous years: 1. Analyze the general ledger account for bonds payable, interest expense, and...

Answered: 1 week ago

Question

★★★★★

Swifty Corporation redeemed $156,000 face value, 11% bonds on April 30,2022 , at 101 . The carrying value of the bonds at the redemption date was $140,868. The bonds pay annual interest, and the...

Answered: 1 week ago

Question

★★★★★

Which of the following about the current ratio is false? Multiple Choice The current ratio is calculated by dividing current assets by current liabilities. The current ratio can affect a supplier's...

Answered: 1 week ago

Question

★★★★★

4. 16. A 5.0-kg block and a 4.0-kg block are connected by a 0.6 kg rod, as shown in the figure. The links between the blocks and the rod are denoted by A and B. A vertical upward force of magnitude F...

Answered: 1 week ago

Question

★★★★★

A small town in S. America had been plagued, thousands of people were dying of yellow fever. The task was to find the cause and eradicate it. Two approaches used were: Microscopic research on the...

Answered: 1 week ago

Question

★★★★★

A small publisher wants to keep data about its books and authors. What are possible business rules (must come from the real world)? Draw a conceptual ERD for the publisher.

Answered: 1 week ago

Question

★★★★★

Consider a contingency table of observed frequencies with seven rows and five columns. a) How many chi-square degrees of freedom are associated with this table? b) What is the chi-square critical...

Answered: 1 week ago

Question

★★★★★

If a medical screening test to detect a disease whose prevalence is 10/100 has 90% hit rate (rate at which positive results are given for positive cases) and 10% false alarm rate (rate at which...

Answered: 1 week ago

Previous Question Next Question