USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

question 98

Multiple Choice

USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)
A $1000 par value bond with five years to maturity and a 6 percent coupon has a yield to maturity of 8 percent. Interest is paid semiannually.
-Refer to Exhibit 13.1. Calculate the Macaulay duration for the bond.

• A) 4.19 years
• B) 4.36 years
• C) 8.72 years
• D) 8.38 years
• E) 9.52 years

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Definitions:

Proprietorship

A business owned by one person.

Partnership

A business owned by two or more persons associated as partners.

Return on Equity

Return on Equity (ROE) measures a company's profitability by revealing how much profit a company generates with the money shareholders have invested.

Net Income

This is the amount of earnings left after all expenses and taxes have been subtracted from revenue.