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…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter6: Fixed-income Securities: Characteristics And Valuation

Section: Chapter Questions

Problem 8P

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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