Calculate the Macaulay Duration for a Five-Year, $1,000 Par Value

question 123

Multiple Choice

Calculate the Macaulay duration for a five-year, $1,000 par value bond, with a 6 percent coupon and a yield to maturity of 8 percent. Interest is paid annually.

• A) 6.44 years
• B) 5.25 years
• C) 4.44 years
• D) 2.50 years
• E) 1.25 years

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Definitions:

Chronemics

The study of how time is perceived, structured, and used in various cultures, and its effect on communication and behavior.

Interpersonal Communication

The process of exchange of information, feelings, and meaning between two or more people through verbal and/or non-verbal methods.

Self-Correcting Mechanism

A process through which a system naturally adjusts and corrects its course without external intervention, aiming to maintain equilibrium or improve function.

Probability

The measure of the likelihood that an event will occur, quantified as a number between 0 and 1.