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

question 68

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 B.

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

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