Problemon january 1 2006 dan is obligated to make annual, Ask an Expert

Accounting

Problem:

On January 1, 2006, Dan is obligated to make annual level payments for 14 years, beginning with a payment on January 1, 2007. His financial adviser told him that this liability has a Macaulay duration of 4.666667 years.

Required:

Question: Determine the annual effective interest rate the advisor used to calculate the duration.

Note: Provide support for rationale.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91167244

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