Afin-Super is the largest superannuation and pension fund in Macquarieland. To promote pension and annuity service, Afin-Super is serving a short-term experience plan(STEP). Plan joiners will be paid $10,000 once a year for a 2-year period (2 payments in total). The first payment will come in 5 years from now. The yield curve is flat at 5% for all maturity. Interests are compounded annually. What is the Macaulay duration of STEP?

Afin-Super is the largest superannuation and pension fund in Macquarieland. To promote pension and annuity service, Afin-Super is serving a short-term experience plan(STEP). Plan joiners will be paid $10,000 once a year for a 2-year period (2 payments in total). The first payment will come in 5 years from now. The yield curve is flat at 5% for all maturity. Interests are compounded annually. What is the Macaulay duration of STEP?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 16P

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