first year 10$ at th Show more The Business issues a bond with the following repayment: 50$ at the end of the first year 10$ at the end of the second year 100$ at the end of the third year and 5$ at the end of the fourth year. (20 pts) a. Calculate the value of this bond assuming a discount rate of 5%. b. Calculate the Macaulay duration of this bond. c. Calculate the effective duration assuming an increase of the discount rate from 5 to 6%. d. Assume that the Business is having a lot of difficulty filling up its MBA program. How could this affect the value of the bond? Show less
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