An Annual Payment Bond with a $1,000 Par Has a 5

question 51

Multiple Choice

An annual payment bond with a $1,000 par has a 5% quoted coupon rate, a 6% promised ytm, and 6 years to maturity. What is the bond's duration?

• A) 5.31 years
• B) 5.25 years
• C) 4.76 years
• D) 4.16 years
• E) 3.19 years  [(t*CF_t/(1.06)^t)]/$950.83

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Definitions:

Central Tendency

A statistical measure that identifies a single value as representative of an entire distribution, typically via the mean, median, or mode.

Inferential Statistics

The field of statistics focused on drawing conclusions or making forecasts about a whole population from a subset of collected data.

Probability

An indicator of how probable an event is, represented numerically between 0 and 1.

Nonrandom Sampling

A sampling technique where the samples are gathered in a process that does not give all the individuals in the population equal chances of being selected.