Consider a newly issued 4-year, 3.11% annual-pay bond trading at par. The present values of each of the bond’s promised payments, discounted at 6.11%. Its Macaulay duration is closest to A. 3.625 years. B. 3.723 years. C.

Consider a newly issued 4-year, 3.11% annual-pay bond trading at par. The present values of each of the bond’s promised payments, discounted at 6.11%. Its Macaulay duration is closest to A. 3.625 years. B. 3.723 years. C.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 13Q: A company issued bonds with a $100,000 face value, a 5-year term, a stated rate of 6%, and a market...

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Question

Consider a newly issued 4-year, 3.11% annual-pay bond trading at par. The present values of each of the bond’s promised payments, discounted at 6.11%. Its Macaulay duration is closest to

3.625 years.

3.723 years.

3.811 years.

3.924 years.

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