The yield curve reveals that the 1-year spot rate is 6.5%, the 2-year spot rate is 10.2%, and the 3-year spot rate is 12.4%. What is the duration of a 3-year bond with a face value of $1,000.00 making annual coupon payments of 11.2%? Do not report the Macaulay duration. O a. 1.91

Essentials Of Investments
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ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
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Chapter1: Investments: Background And Issues
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The yield curve reveals that the 1-year spot rate is 6.5%, the 2-year spot rate is
10.2%, and the 3-year spot rate is 12.4%. What is the duration of a 3-year bond with
a face value of $1,000.00 making annual coupon payments of 11.2%? Do not
report the Macaulay duration.
a. 1.91
O b.
2.22
O c. 1.65
O d. 2.55
O e.
O f.
1.76
O g. 2.42
2.05
Oh. 2.69
Transcribed Image Text:0 The yield curve reveals that the 1-year spot rate is 6.5%, the 2-year spot rate is 10.2%, and the 3-year spot rate is 12.4%. What is the duration of a 3-year bond with a face value of $1,000.00 making annual coupon payments of 11.2%? Do not report the Macaulay duration. a. 1.91 O b. 2.22 O c. 1.65 O d. 2.55 O e. O f. 1.76 O g. 2.42 2.05 Oh. 2.69
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