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

---

Definitions:

Federal Support

The assistance or backing provided by a federal government to states, organizations, or individuals, often in the form of financial aid, policies, or resources.

Irrigation System

An artificial method of supplying water to land or crops to promote agriculture in areas lacking sufficient rainfall.

Mythic West

The Mythic West refers to the idealized and romanticized vision of the American West during the 19th and early 20th centuries, characterized by themes of adventure, lawlessness, and opportunity.

American Identity

A concept referring to the shared culture, values, traditions, and beliefs that define the people of the United States.