A Bond's Macaulay Duration Is 7

question 32

Multiple Choice

A bond's Macaulay duration is 7.95 years. If the current annual interest rate is 7%, what is the modified duration of this bond?

• A) 7.00 years
• B) 7.88 years
• C) 7.43 years
• D) 7.95 years
• E) 8.51 years

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Definitions:

Malfunctioned

Refers to something that has failed to function properly or as expected.

Negligence

The failure to take reasonable care to avoid causing injury or loss to another person, resulting in legal liability.

Interest Act

Legislation that stipulates regulations regarding the calculation and payment of interest on various types of loans and debts.

Criminal Code

is a document that compiles all criminal laws and procedures in a particular jurisdiction.