Question: 3. a. Derive an expression for the value and duration of a perpetuity of $c per annum if interest rates are level at r %?

3. a. Derive an expression for the value and duration of

3. a. Derive an expression for the value and duration of a perpetuity of $c per annum if interest rates are level at r %? The following sums of infinite series might prove useful for your solution: x + x2 + x3+... x + 2x2 + 3x3+...= (1 x)2 1 - X (7 marks)

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