Guess the duration of the following investment. Is it less than two years, two to three years, three to four years, or greater than four years? After your guess, use a discount rate of 6 percent and calculate the present value of the cash flows and then duration. 

  

      

 
 

Transcribed Image Text:

Years from now Cash flow 1 $0 2 $1,000 3 $5,000 4 $2,000 Years from now Cash flow 1 $0 2 $1,000 3 $5,000 4 $2,000

Answer rating: 100% (QA)

Step 1 of 6 Evaluate the duration of the following investment Also calculate the pre... View the full answer