Kylie bought a 7-year, 5,000 par value bond with an annual coupon rate of 7.6% paid semi-annually. She bought the bond with no premium or discount.
Calculate the Macaulay duration of this bond with respect to the yield rate on the bond.
Answer: 440 grams for 1.54 is the better value
Explanation:
Take the price and divide by the number of grams
1.54 / 440 =0.0035 per gram
1.26 / 340 =0.003705882 per gram
0.0035 per gram < 0.003705882 per gram