Calculate the Modified Duration of a Bond That Has a Macaulay

question 39

Multiple Choice

Calculate the modified duration of a bond that has a Macaulay duration of 7.6 and the bond pays interest semi-annually with a coupon rate of 6 percent and a required rate of return of 8 percent.

• A) 7.04
• B) 7.17
• C) 7.31
• D) 7.38
• E) 8.12

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Definitions:

Goal

An aim or desired outcome that a person or a system envisions, plans, and commits to achieve within a specified timeframe.

Energizer

Substances or activities that increase energy levels, focus, or alertness, often used to overcome fatigue or enhance performance.

Decision

The process of making a choice or finding a solution among several alternatives, often following careful thought and consideration.

Speed Things Up

To cause or hasten a process, action, or series of events, making them occur more quickly than usual.