Exhibit 19.10 Use the Information Below for the Following Problem(S)

question 44

Multiple Choice

Exhibit 19.10
Use the Information Below for the Following Problem(S)
You are creating a portfolio that consists of the following two bonds. Bond A pays an annual 7% coupon, matures in two years, has a yield to maturity of 8%, and a face value of $1,000. Bond B pays an annual 8% coupon, matures in three years, has a yield to maturity of 9%, and a face value of $1,000.
-Refer to Exhibit 19.10.Calculate the Modified Duration for Bond A.

• A) 0.98
• B) 1.79
• C) 1.90
• D) 1.93
• E) 2.31

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