USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

question 120

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 modified 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:

Austria

A landlocked country in Central Europe known for its cultural history, mountainous terrain, and contributions to classical music.

Italy

A country located in Southern Europe, known for its rich history, culture, art, and contribution to the development of Western civilization.

Economic Significance

The importance or impact of an economic activity or phenomenon in terms of its effects on the overall economy, such as employment levels or GDP.

Exchange

The act of trading goods, services, currencies, or other items of value between parties.