Exhibit 18.2 Use the Information Below for the Following Problem(S)

question 97

Multiple Choice

Exhibit 18.2
Use the Information Below for the Following Problem(S)
Talmart Corporation bonds have a $1,000 face value and will mature in 4 years. The bonds have a 7% coupon rate. Interest is paid annually and the required rate of return is 6 percent for these bonds.
-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% and a required rate of return of 8%.

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

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Definitions:

Mental Representations

Internal images, ideas, or thoughts that stand in for objects, events, or relations in the outside world, aiding in cognition and perception.

Abstractly

Thinking in a way that is not concrete, focusing on ideas and concepts rather than physical or practical realities.

Logically

Pertaining to or characterized by clear, systematic, and rational thinking or reasoning.

Pretend Play

Imaginative play in which children create scenarios and act out roles, often involving objects to represent other things.