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Hi John,
Just a query on part c in this question and the calculation for Macaulay Duration. Why do we not include an annual interest payment of 2% in our calculations similar to other examples of maccaulay duration where interest charges are included? Is it because we are discounting at 2%?
Thanks,
PadraigYes, that is the reason.
Incidentally, you can find free lectures working through the whole of this question linked from the following page:
https://opentuition.com/acca/afm/afm-revision-lectures/
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