Consider a one-year loan with a face value of $100,000 and a coupon rate of 11%....
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Consider a one-year loan with a face value of $100,000 and a coupon rate of 11%. The loan requires payment of accrued interest and one-half (50%) of the principal at the end of six months. The remaining principal and accrued interest are due at the end of the year. If the required yield is 19%, what is the duration of the loan? (Please round your answer to three decimal places.) Consider a one-year loan with a face value of $100,000 and a coupon rate of 11%. The loan requires payment of accrued interest and one-half (50%) of the principal at the end of six months. The remaining principal and accrued interest are due at the end of the year. If the required yield is 19%, what is the duration of the loan? (Please round your answer to three decimal places.)
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To calculate the duration of the loan we need to first calculate the present value of all the cash f... View the full answer
Related Book For
Financial Institutions Management A Risk Management Approach
ISBN: 978-0071051590
8th edition
Authors: Marcia Cornett, Patricia McGraw, Anthony Saunders
Posted Date:
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