Exhibit 18.1 Use the Information Below for the Following Problem(S)

question 75

Multiple Choice

Exhibit 18.1
Use the Information Below for the Following Problem(S)
A $1000 par value bond with 5 years to maturity and a 6% coupon has a yield to maturity of 8%. Interest is paid semiannually.
-Refer to Exhibit 18.1.Calculate the modified duration for the bond.

• A) 4.19 years
• B) 4.36 years
• C) 8.72 years
• D) 8.38 years
• E) 9.52 years

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Definitions:

Horizontal Analysis

A financial analysis technique that compares historical financial data over a series of periods to identify trends and growth patterns.

Income Statement

The income statement is a financial report that provides a summary of a company's revenues, expenses, and profits/losses over a specified period.

Sales

Revenue earned from selling goods or services over a certain period.

Percent Change

A measure that indicates the relative difference between an initial value and a final value, expressed as a percentage.