Calculate the Duration of a 4-Year $1,000 Face Value Bond

question 7

Multiple Choice

Calculate the duration of a 4-year $1,000 face value bond, which pays 8% coupons annually throughout maturity and has a yield to maturity of 9%.

• A) 3.29 years
• B) 3.58 years
• C) 3.69 years
• D) 3.89 years
• E) 4.00 years

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Definitions:

Venture Capital

Funding given by investors to small businesses and startups deemed to have significant potential for long-term growth.

Business Plan

A document that outlines a business's goals, strategies, market analysis, financial projections, and operational plans.

Outsource

The practice of hiring third-party firms to handle non-core business operations or services.

Startup Capital

Startup Capital is the funding needed to start a new business, used for initial operations, product development, and scaling efforts.