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A company has purchased a $1,000,7%,5 year-bond at par that pays interest annually.The discount factors for the present value of $1 at 7% for five periods are as follows: period factor 1 0.935 2 0.873 3 0.816 4 0.763 5 0.713
For purpose of duration hedging,the duration of the bonds is A. 5.39 years B. 5.00 years C. 4.39 years D. 3.81 years |