Calculate the Duration of a Two-Year Corporate Loan Paying 6

question 124

Multiple Choice

Calculate the duration of a two-year corporate loan paying 6 percent interest annually, selling at par.The $30,000,000 loan is 100 percent amortizing with annual payments.

• A)2 years.
• B)1.89 years.
• C)1.94 years.
• D)1.49 years.
• E)1.73 years.

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Definitions:

Government Employees

Individuals who work within the various branches of the government (national, state, local) and are paid through the public sector budget.

Private Sector Workers

Employees who work for businesses owned by individuals or entities other than the government or public sector.

Phalanges

The bones of the fingers and toes.

Carpals

The bones that form the wrist, connecting the forearm to the hand.