Exhibit 16-8 USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S)

question 54

Multiple Choice

Exhibit 16-8
USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S)
Consider two bonds, both pay annual interest. Bond C has a coupon of 6% per year, maturity of 5 years, yield to maturity of 6% per year, and a face value of $1000. Bond D has a coupon of 8% per year, maturity of 15 years, yield to maturity of 6% per year, and a face value of $1000.
-Refer to Exhibit 16-8. Calculate the modified duration for Bond D.

• A) 9.5
• B) 9.8
• C) 9.2
• D) 15
• E) None of the above

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Definitions:

Accounts Receivable

Amounts owed to a business by its customers for goods or services delivered but not yet paid for.