Security P is a preferred stock and Security Z is a zero coupon bond that has 11 years remaining until maturity. Both securities

Question

1 year ago

12

have an yield of 10%. The duration of Security P ____________.

1 answer:

uranmaximum [27] · Answer 1 · 2023-06-07T16:33:40+03:00

The duration of Security P based on the info given will be 11 years.

<h3>How to calculate the time?</h3>

From the information given, Security P is a preferred stock and Security Z is a zero coupon bond that has 11 years remaining until maturity.

Therefore, the duration will be:

= (1 + y)/y

= (1 + 0.1)/0.1

= 1.1/0.1

= 11 years

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