Exhibit 16-10 USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S)

question 67

Multiple Choice

Exhibit 16-10
USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S)
You are creating a portfolio that consists of the following two bonds. Bond A pays an annual 7% coupon, matures in two years, has a yield to maturity of 8%, and a face value of $1,000. Bond B pays an annual 8% coupon, matures in three years, has a yield to maturity of 9%, and a face value of $1,000.
-Refer to Exhibit 16-10. Calculate the Macaulay Duration for Bond A.

• A) 0.98
• B) 1.79
• C) 1.90
• D) 1.93
• E) 2.31

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Direct Taxes

Taxes that are levied directly on the income or wealth of an individual or organization, such as income tax and property tax.

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A measure for evaluating the price index of all fresh, domestically produced, final goods and services in an economy.

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The total number of people inhabiting a particular territory or geographic area.