face value of S100,000and a coupon rate of 20%. The loan requires payment ofaccrued interest and one-quarter (25%) of the principaat the end of six months. The remaining principal andaccrued interest are due at the end of the year. lf therequired yield is 15%, what is the duration of the loan interm of years? (Please round your a
face value of S100,000and a coupon rate of 20%. The loan requires payment ofaccrued interest and one-quarter (25%) of the principaat the end of six months. The remaining principal andaccrued interest are due at the end of the year. lf therequired yield is 15%, what is the duration of the loan interm of years? (Please round your a
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Consider a one-year loan with a face value of S100,000and a coupon rate of 20%. The loan requires payment ofaccrued interest and one-quarter (25%) of the principaat the end of six months. The remaining principal andaccrued interest are due at the end of the year. lf therequired yield is 15%, what is the duration of the loan interm of years? (Please round your answer to three decimal places.)
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