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ABC Bank holds 20 million TL in cash. ABC bank invests in a bond with...

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Accounting

ABC Bank holds 20 million TL in cash. ABC bank invests in a bond with 2 years to maturity that pays 11% coupon annually. The yield to maturity (YTM) on the bond is 11%. The face value of the bond (or the principal) is 40 million TL. ABC Bank has also provided 40 million TL in business loans (face value or principal of mortgages is 40 million TL) that have 5 years to maturity and pay 12% coupon annually. The yield to maturity on the business loans is 12 % and the duration is 4.04 years. ABC Bank has deposits totaling 85 million TL with time to maturity 1 year for which the bank pays interest of 9% annually. The yield to maturity on the deposits is 9%. What is the duration of the bond? Please round to the nearest hundredth (ex 99.156 is 9.16 and 9.153 is 9.15).

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