You bought a $100 par value, 7%annual coupon bond that matures inthree year and has a yield-to-maturityof 8%. What is the Macauley durationof this bond? 1.95 years 2.60 years 2.81years 3.00 years

Here's how to calculate the Macaulay Duration for this bond:1. Define the variables:C = Annual…

Answered: You bought a $100 par value, 7% annual…

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter4: Bond Valuation

Section: Chapter Questions

Problem 13P: Yield to Maturity and Current Yield You just purchased a bond that matures in 5 years. The bond has...

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You bought a $100 par value, 7% annual coupon bond that matures in three year and has a yield-to-maturity of 8%. What is the Macauley duration of this bond? 1.95 years 2.60 years 2.81 years 3.00 years