Consider a Security with a Face Value of $100 000

Multiple Choice

Consider a security with a face value of $100 000 to be repaid at maturity. The maturity of the security is 3 years. The coupon rate is 9 per cent p.a. and coupon payments are made semi-annually. The current discount rate is 12 per cent p.a. What is the security's duration (round your answer to two decimals) ?

A) 2.68 years
B) 2.68 half-years
C) 3 years
D) 0.38 years