Consider a bond that promises the following cash flows. The yield to maturity is 12%....
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Accounting
Consider a bond that promises the following cash flows. The yield to maturity is 12%.
| year | 0 | 1 | 2 | 3 | 4 |
| promised payments | 160 | 160 | 170 | 180 | 230 |
You plan to buy this bond, hold it for 2.5 years, and then sell the bond.
Assuming all market interest rates are 12%, what is the duration of this bond?
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