A Bond Has a Macaulay Duration of 7

question 93

Multiple Choice

A bond has a Macaulay duration of 7.5, a yield to maturity of 6.6 percent, a coupon rate of 7.5 percent, and semiannual interest payments. What is the bond's modified duration?

• A) 6.59 years
• B) 6.84 years
• C) 6.92 years
• D) 7.06 years
• E) 7.26 years

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Definitions:

Calories

A unit of energy used to measure the amount of energy contained in food and drink and the energy expended during physical activity.

Gram

A metric unit of mass equal to one thousandth of a kilogram, commonly used to measure small quantities of substances.

Hemoglobin

A protein in red blood cells responsible for transporting oxygen from the lungs to the rest of the body.

Anemia

A condition characterized by a deficiency of red blood cells or hemoglobin, leading to a lack of oxygen transport in the body.