**Question 871** duration, Macaulay duration, modified duration, portfolio duration

Which of the following statements about Macaulay duration is **NOT** correct? The Macaulay duration:

**Question 872** duration, Macaulay duration, modified duration, portfolio duration

A fixed coupon bond’s **modified** duration is **20** years, and yields are currently **10**% pa compounded annually. Which of the following statements about the bond is **NOT** correct?

Which of the following statements about Macaulay duration is **NOT** correct? The Macaulay duration:

**Question 918** duration, Macaulay duration, modified duration, bond convexity

A fixed coupon bond’s modified duration is 10 years, and yields are currently 5% pa compounded annually. Which of the following statements about the bond is **NOT** correct?

Which of the following statements about bond convexity is **NOT** correct?

Find the Macaulay duration of a **2** year **5**% pa **annual** fixed coupon bond which has a $**100** face value and currently has a yield to maturity of 8% pa. The Macaulay duration is:

Find the Macaulay duration of a **2** year **5**% pa **semi**-annual fixed coupon bond which has a $**100** face value and currently has a yield to maturity of 8% pa. The Macaulay duration is:

Assume that the market portfolio has a duration of **15** years and an individual stock has a duration of **20** years.

What can you say about the stock's beta with respect to the market portfolio? The stock's beta is likely to be:

**Question 999** duration, duration of a perpetuity with growth, CAPM, DDM

A stock has a beta of **0.5**. Its next dividend is expected to be $**3**, paid **one** year from now. Dividends are expected to be paid annually and grow by **2**% pa forever. Treasury bonds yield **5**% pa and the market portfolio's expected return is **10**% pa. All returns are effective annual rates.

What is the Macaulay **duration** of the stock now?

**Question 1000** duration, duration of a perpetuity with growth

A stock's duration increases since its dividend growth rate increases while its total required return on equity remains unchanged.

###D_\text{Macaulay} = \dfrac{1+r}{r-g}###What will be the effect on the stock's CAPM beta? Assume that there's no change in the risk free rate or market risk premium and that the dividend growth rate increases due to the company cutting dividends to re-invest in zero-NPV projects. The firm is unlevered. The company's equity beta will: