Calculate the macaulay duration

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1. Consider a three-year bond paying a coupon of 5% per annum, also yielding 5% yield to maturity. (For simplicity we assume annual coupons.) Calculate the Macaulay duration.

2. Bank A quotes a bid rate of $0.300 and an ask rate of $0.305 for the Malaysian ringgit (MYR). Bank B quotes a bid rate of $0.306 and an ask rate of $0.310 for the ringgit. What will be the profit for an investor that has $500,000 available to conduct locational arbitrage?

Reference no: EM132014536

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