Multiple Choice
An FI purchases a $9.982 million pool of commercial loans at par.The loans have an interest rate of 8 percent, a maturity of five years, and annual payments of principal and interest that will exactly amortize the loan at maturity.What is the duration of this asset?
A) 4.12 years.
B) 3.07 years.
C) 2.50 years.
D) 2.85 years.
E) 5.00 years.
Correct Answer:
Verified
Correct Answer:
Verified
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