Calculate the Macaulay Duration for a 5-Year $1,000 Par Value

question 91

Multiple Choice

Calculate the Macaulay duration for a 5-year $1,000 par value bond,with a 6% coupon and a yield to maturity of 8%.Interest is paid annually.

• A) 6.44 years
• B) 5.25 years
• C) 4.44 years
• D) 2.50 years
• E) None of the above

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Definitions:

Defer Gratification

The process of resisting the temptation of an immediate reward in preference for a later reward.

Inhibit Impulse

The psychological mechanism through which an individual restrains or controls their instincts or desires.

Goal-directed Behaviors

Represents actions that are performed with a specific outcome or goal in mind.

Immediate Reward

A benefit received directly following a certain action or behavior, which can reinforce the behavior and encourage its repetition.