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Consider a 4-year annual coupon bond A with a face value of $100, an annual cou...
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Consider a 4-year annual coupon bond A with a face value of $100, an annual coupon rate of 10%, and a Macaulay duration of 3.53 years. The term structure of interest rates is flat at 5%, i.e., 𝑦 =5% for all t. At the same time, there is a Bond B that is similar to Bond A in all respects except that Bond B has a face value of $1,000 instead of $100. What is the Macaulay duration of Bond B?
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