What is the Macaulay duration of a 3% bond with 3 years to maturity, discounted at a rate of 2% per year if (a) interest is paid annually, and (b) interest is paid semiannually? Show the payoff schedule in each case. For the following questions, assume that current prices on Zero coupon treasury bonds with the indicated times to maturity (in years) are: T 1 2 3 5 P 99.0 97 94.5 90.
What is the Macaulay duration of a 3% bond with 3 years to maturity, discounted at a rate of 2% per year if (a) interest is paid annually, and (b) interest is paid semiannually? Show the payoff schedule in each case. For the following questions, assume that current prices on Zero coupon treasury bonds with the indicated times to maturity (in years) are: T 1 2 3 5 P 99.0 97 94.5 90.
Chapter13: Long-term Liabilities
Section: Chapter Questions
Problem 3EA: Krystian Inc. issued 10-year bonds with a face value of $100,000 and a stated rate of 4% when the...
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