Calculate the Duration of a 6 Percent, $1,000 Par Bond

question 65

Multiple Choice

Calculate the duration of a 6 percent, $1,000 par bond maturing in three years if the yield to maturity is 10 percent and interest is paid semiannually.

• A) 1.35 years
• B) 1.78 years
• C) 2.50 years
• D) 2.78 years
• E) 2.95 years

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Definitions:

Psychological Problems

Issues or conditions that affect a person's thinking, feeling, behavior, or mood, often impacting their ability to function in everyday life.

Factitious Disorder

A disorder characterized by faking or producing symptoms of illness or injury (e.g., by putting blood in a urine sample or swallowing a noxious substance) to gain a doctor’s attention and thus satisfy a need to play the role of patient. Classified in DSM-5 within the group of somatic symptom and related disorders.

Malingering

Pretending to be ill in order to achieve some specific objective. Not to be considered a somatoform disorder, in which the sufferer truly believes there is a serious physical problem.

Conversion Disorder

A mental condition where psychological stress is manifested as physical symptoms without an underlying medical cause.