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

question 10

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 B.

• A) 1.44
• B) 2.47
• C) 2.55
• D) 2.70
• E) 2.78

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Definitions:

Obsessive-Compulsive Personality Disorder

A personality disorder characterized by a pervasive pattern of preoccupation with orderliness, perfectionism, and mental and interpersonal control.

Intrusive

Unwanted and disruptive thoughts, images, or impulses that invade an individual's consciousness, often causing significant distress.

Obsessive-Compulsive Personality Disorder

A personality disorder characterized by a preoccupation with orderliness, perfectionism, and control, leading to inflexibility and inefficiency.

Stingy

Reluctant to spend or give; showing a lack of generosity.