Calculate the Duration of a 4-Year $1,000 Face Value Bond,which

question 51

Multiple Choice

Calculate the duration of a 4-year $1,000 face value bond,which pays 8% coupons annually throughout maturity and has a yield to maturity of 9%.

• A) 3.29 years
• B) 3.57 years
• C) 3.69 years
• D) 3.89 years
• E) 4.00 years

---

Definitions:

Variable Manufacturing Cost

Costs in manufacturing that vary with the level of output, including costs such as raw materials and direct labor.

Unit Product Cost

The total cost (direct materials, direct labor, and manufacturing overhead) associated with producing one unit of a product.

Reduced Price

The selling price of a product or service after it has been discounted from the original or standard price.

Annual Financial Advantage

Annual Financial Advantage refers to the financial benefit realized on an annual basis from a particular investment or decision.