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:

Cure

The correction of a defect in goods that caused the goods to be rejected by a buyer.

Delivery

The act of transporting goods or services from a seller or provider to the recipient's location, completing a sales transaction.

Implied Warranty

A legal assumption that a product or service sold will meet basic quality and functionality standards.

Merchantability

A warranty that the goods sold meet reasonable expectations for use, including being fit for the purpose for which they are sold.