Using the information in Table 2, Klein would like to compute the duration of the highlighted bond. Which is the closest to Klein's answer? A. 8.88. B. 9.06. C. 10.54. D. 12.11.
PVBP = (0.0001) × D × (price + accrued interest) × 10,000 Note: The 10,000 is to convert the price to $1,000,000 par to match the PVBP units. Rearranging, D = PVBP ÷ (price + interest) = 1,211.2284 ÷ (133.75 + 2.5824) = 8.88
