The Macaulay's Duration of a 10-Year, 10% Bond with a Face

question 22

Multiple Choice

The Macaulay's duration of a 10-year, 10% bond with a face value of $1,000 and a market rate of 8%, compounded annually is:

• A) 10 years
• B) 11 years
• C) 12 years
• D) 13 years
• E) None of the above

---

Definitions:

LIFO

Last-In, First-Out, an inventory valuation method where the most recently produced or acquired items are the first to be expensed.

Average Cost

A calculation that divides the total cost of goods available for sale by the total units available for sale, offering a way to determine the cost of an item's inventory.

First-In, First-Out

An inventory valuation method where the oldest inventory items are recorded as sold first, used in both accounting and inventory management.

Last-In, First-Out

An inventory valuation method where the most recently produced items are the first to be expensed, often used in industries where inventory items are indistinguishable.