Consider a business loan maturing in three years that has three remaining annual payments in one,...

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Consider a business loan maturing in three years that has three remaining annual payments in one, two, and three years. The annual payments are all equal to $5 Million. While analyzing the loan, you are using a YTM equal to 6%. Determine the duration of the loan. Consider a business loan maturing in three years that has three remaining annual payments in one, two, and three years. The annual payments are all equal to $5 Million. While analyzing the loan, you are using a YTM equal to 6%. Determine the duration of the loan.

Answer rating: 100% (QA)

To determine the duration of the loan we need to calculate the weighted average time until each cash ... View the full answer