A financial instrument provides three future cash flows:1. $1,406.01 at the end of 2 years2. $2,596.43 at the end of 8 years3. $1,172.62 at the end of 13 yearsCalculate the duration (D) of the financial instrument at a yield of 7% pa compounded yearly. Give your answer in years to 2 decimal places.Dyears

Step 1:We have to calculate the duration of the financial instrument.We will use the excel for…

Answered: A financial instrument provides three…

Financial Management: Theory & Practice

16th Edition

ISBN:9781337909730

Author:Brigham

Publisher:Brigham

Chapter4: Time Value Of Money

Section: Chapter Questions

Problem 1MC

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A6) Finance A financial instrument provides three future cash flows: $1,710.00 at the end of 3 years $1,051.74 at the end of 8 years $2,105.93 at the end of 14 years Calculate the duration (D) of the financial instrument at a yield of 6% pa compounded yearly. Give your answer in years to 2 decimal places. D = years
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