Consider a Security with a Face Value of $100 000

question 65

Multiple Choice

Consider a security with a face value of $100 000, which is to be repaid at maturity.The security pays an annual coupon of 8% and has a maturity of three years.The current discount rate is 10%.What is the security's duration (round to two decimals) ?

• A)2.78 years
• B)3 years
• C)0.36 years
• D)1.94 years

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Definitions:

DSM-5

The 5th edition of the Diagnostic and Statistical Manual of Mental Disorders, a handbook used by healthcare professionals for diagnosing mental disorders.

Diagnostic

Pertaining to the identification of the nature or cause of a health problem, usually following a thorough examination or testing.

Statistical Manual

A publication containing standardized criteria, classifications, and statistical data used for diagnostic and research purposes in various fields.

Obsessive-Compulsive

A condition characterized by intrusive thoughts that produce uneasiness, apprehension, fear, or worry; and behaviors aimed at reducing the anxiety associated with these obsessions.