Consider the following three-bond portfolio in which all the bonds are option free: Bond Price Par Value Yield Market Value Duration 9% 5-year $122.4565 $5 million 4% $6,122,823 4.142 5% 20-year $113.6777 $2 million 4% $2,273,555 13.087 5.5% 30-year $126.0707 $2 million 4% $2,521,413 16.290   What is the portfolio duration?   A. 7.81   B. 8.81   C. 6.80   D. 8.0

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
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Chapter1: Investments: Background And Issues
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Consider the following three-bond portfolio in which all the bonds are option free:

Bond

Price

Par Value

Yield

Market Value

Duration

9% 5-year

$122.4565

$5 million

4%

$6,122,823

4.142

5% 20-year

$113.6777

$2 million

4%

$2,273,555

13.087

5.5% 30-year

$126.0707

$2 million

4%

$2,521,413

16.290

 

What is the portfolio duration?

  A.

7.81

  B.

8.81

  C.

6.80

  D.

8.0

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