What is its macaulay duration

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Reference no: EM131234455

A 2-year bond costs $25,000 today. It pays $1,000 interest at the end of the first year and $1,000 interest at the end of the second year. At the end of the second year, it also repays the principal of $25,000. (Use 4 decimal places of accuracy when computing durations.)

(a) What is its plain duration?

(b) If the yield curve is a flat 0%, what is its Macaulay duration?

(d) If the yield curve is a flat 10%, what is its Macaulay duration?

Reference no: EM131234455

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