FINANCIAL ACCOUNTING
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ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Transcribed Image Text:The duration of a portfolio is equal to the value-weighted average of the durations of the bonds in the portfolio. If you have the following portfolio of bonds and its mod duration is 5.6 years:
| Bond | Value in $$ | Mod Duration |
|------|-------------|--------------|
| A | 220,000 | 3.3 |
| B | 440,000 | x=? |
then the mod duration of Bond B is ..................................... years.
**Hint:** Compute the weight of each bond in the total first.
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