- CFA Exams
- CFA Level I Exam
- Study Session 15. Fixed Income (2)
- Reading 46. Understanding Fixed-Income Risk and Return
- Subject 2. Macaulay, Modified and Effective Durations

###
**CFA Practice Question**

Consider a four-year, 5% annual coupon payment bond. Its yield to maturity is 10% and its price is 84.16 per 100 of par value.

B. 0.7172

C. 0.8522

To calculate Macaulay duration, what should be the weight of the last payment of 105?

A. 0.8750

B. 0.7172

C. 0.8522

Correct Answer: C

The total of present value is 84.16. The weight is 71.72/84.16 = 0.8522.

###
**User Contributed Comments**
1

User |
Comment |
---|---|

janglejuic |
71.72 / (4.55+4.13+3.76+71.72) |