Question
You are consider several investment options A discount rate for all 3 investments is 8% each year Which of the bond you consider has the
You are consider several investment options
A discount rate for all 3 investments is 8% each year
Which of the bond you consider has the lowest duration (in years)?
a. investing $100,000 in a government bond where the principal is never returned, interest is paid forever
b. investing $10,000 in a 25 year zero coupon bond
c investing $15,000 in a 15 year zero coupon bond
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Financial management theory and practice
Authors: Eugene F. Brigham and Michael C. Ehrhardt
12th Edition
978-0030243998, 30243998, 324422695, 978-0324422696
