60) Why did I get this wrong? A Treasury bond that settles on October 18, 2019, matures on March 30, 2038. The coupon rateis 5.70 percent, and the bond has a yield to maturity of 5.01 percent. What are the Macaulayduration and modified duration? (Use the duration functions in Excel to solve the problem. Donot round intermediate calculations. Round your answers to 4 decimal places.)Answer is complete but not entirely correct.Macaulay duration11.8100Modified duration11.2500

Macaulay duration refers to the weighted average period which is up to the maturity of the cash…

Answered: Macaulay duration 11.8100 Modified…

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Macaulay duration 11.8100 Modified duration 11.2500

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter6: Fixed-income Securities: Characteristics And Valuation

Section: Chapter Questions

Problem 20P

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Concept explainers

Market Efficiency

Market efficiency refers to the market's ability to provide investors with all available information about investment options for buying and selling securities. Market efficiency reflects the true value of securities without undervaluing or overvaluing them. When the quality and quantity of information increase, the market becomes more efficient, allowing it to reduce arbitrage and obtain higher market returns from investment. In a well-functioning market, everyone receives all information completely and immediately at no cost. It opens up a plethora of opportunities for investors to access various investment options.

Question

60) Why did I get this wrong?

A Treasury bond that settles on October 18, 2019, matures on March 30, 2038. The coupon rate
is 5.70 percent, and the bond has a yield to maturity of 5.01 percent. What are the Macaulay
duration and modified duration? (Use the duration functions in Excel to solve the problem. Do
not round intermediate calculations. Round your answers to 4 decimal places.)
Answer is complete but not entirely correct.
Macaulay duration
11.8100
Modified duration
11.2500

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