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

question 32

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 Macaulay Duration for Bond A.

• A) 0.98
• B) 1.79
• C) 1.90
• D) 1.93
• E) 2.31

---

Definitions:

Middle Aged

Referring to the period of life, usually between the ages of about 45 and 65, often considered as a time of maturity but before old age.

Critical Thinker

An individual who actively seeks, evaluates, and applies information in a logical manner to solve problems and make decisions.

Emotionally Charged

Describes situations or information that evoke strong emotional reactions.

Fact-Checked

The process of verifying information to ensure its accuracy and reliability, often in the context of journalism or research.