Ask Question
7 August, 15:59

A portfolio consists of the following two bonds:$10,000 market value Bond A with duration of 4; $30,000 market value Bond B with duration of 6; Both bonds yield at 10% and make an annual couple payment. What is this bond portfolio's Macaulay duration?

+4
Answers (1)
  1. 7 August, 19:40
    0
    The bond portfolio's Macaulay duration is 5.50

    Explanation:

    According to the following formula

    Portfolio duration = weighted duration = (weight of Bond A*Duration of A) + (weight of Bond B*Duration of B)

    = ((10,000/40,000) * 5) + ((30,000/40,000) * 6) = 5.50
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “A portfolio consists of the following two bonds:$10,000 market value Bond A with duration of 4; $30,000 market value Bond B with duration ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers