A perpetuity-due with annual payments of 100 has a duration of 26.88 years at an annual effective rate of interest i. Calculate the duration of this perpetuity if the annual effective rate of interest is i +1% instead of i. A) 21.19 B) 22.63 C) 24.95 D) 27.93 E) 28.3)

A perpetuity-due with annual payments of 100 has a duration of 26.88 years at an annual effective rate of interest i. Calculate the duration of this perpetuity if the annual effective rate of interest is i +1% instead of i. A) 21.19 B) 22.63 C) 24.95 D) 27.93 E) 28.3)

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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5. A perpetuity-due with annual payments of 100 has a duration of 26.88 years at an annual
effective rate of interest i. Calculate the duration of this perpetuity if the annual effective
rate of interest is i +1% instead of i.
A) 21.19
B) 22.63
C) 24.95
D) 27.93
E) 28.31

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K Find the present value of the following perpetuity. Made At: end Perpetuity Payment $190 Payment Period 1 month Interest Rate 7.8% Conversion Period annually ETT The present value is $ (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed)
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