Calculate the Modified Duration of a Two-Year Corporate Loan Paying

question 53

Multiple Choice

Calculate the modified duration of a two-year corporate loan paying 6 percent interest annually.The $40,000,000 loan is 100 percent amortizing, and the current yield is 9 percent annually.

• A)2 years.
• B)1.91 years.
• C)1.94 years.
• D)1.49 years.
• E)1.36 years.