Compute the macaulay duration

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Reference no: EM13122614

Compute the Macaulay duration under the following conditions:

a. A bond with a five-year term to maturing, a 12 percent coupon (annual payments), and a market yield of 10 percent.

b. A bond with a four-year term to maturity, a 12 percent coupon (annual payments), and a market yield of 10 percent.

c. Compare your answers to Parts a and b, and discuss the implications of this for classical immunization.

Reference no: EM13122614

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