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0.0/4.0 points (graded) The current term structure of interest rates is flat at 2.50%, and...

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Accounting

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0.0/4.0 points (graded) The current term structure of interest rates is flat at 2.50%, and is expected to shift up. You have locked into a long-term lease on a real estate in Cambridge to pay $1 million a year forever, starting 3 years (t=3) from now (t=0). Question 7, Part (B) 0.0/7.0 points (graded) What is the modified duration of this liability? (Hint: You need to use the definition of modified duration and differentiate the price (i.e., present value) of this liability.)

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