TABLE 18-1 An Example of Calculallig lLD Maturity, Currently Priced at $974.17 w
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Question
TABLE 18-1 An Example of Calculallig lLD Maturity, Currently Priced at $974.17 with aYTM of 5.6 Percent (4) Weighted PV of (5) Weighted Average of Time Periods (I) x (4) 0.012 0.024 0.035 0.046 0.056 0.065 0.074 0.082 0.090 3.991 4.477 (3) PV of CFs CFs (Weighted by Price) (3)/Price of the Bond (2) Cash (1) PeriodsFlow (CF) 25 25 25 25 25 25 25 25 25 24319 23.657 23012 22.386 21.776 21.183 20.606 20.044 19.499 0.025 0024 0024 0023 0.022 0.022 0.021 0.02 0.020 0.798 1.000 0.5 1.5 2.5 4.5 025 777.665Explanation / Answer
Calculation of Duration
3.00 1050 829.82 0.789 2.367
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Duration 2.675
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Duration = 2.675 Years
Periods cashflow pv of CF weighted PV of Cashflows weighted average of time periods (1) (2) (3) (4) 5=(4)*(1) 0.50 50 48.075 0.046 0.023 1.00 50 46.23 0.044 0.044 1.50 50 44.45 0.042 0.063 2.00 50 42.74 0.040 0.080 2.50 50 41.10 0.039 0.098Related Questions
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