Relationship between macdur and bond tenor

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1. Hank Aaron is summarizing the relationship between the Macaulay duration of an option-free bond and bond coupon size, the required return, and the tenor of the bonD. Hank knows that the MacDur and coupon size are always negatively related and the MacDur and the required return are always negatively relateD. What is the relationship between MacDur and bond tenor?

Always positively related

Usually positively related

Usually negatively related

Always negatively related

2. Suppose that a property can generate cash flows of $15,000 per year for eight years and can sell for $100,000 at the end of the investment period. Assuming a discount rate of 12%, what is the present value of this property (Assume end of period cash flows in your calculation)? Show all work.

Reference no: EM131883780

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