Annuity A pays 1 at the beginning of each year for three years. Annuity B pays 1 at the end of each year for four years. The Macaulay duration of Annuity A at the time of purchase is 0.93. Both annuities offer the same yield rate. Calculate the Macaulay duration of Annuity B at the time of purchase.

Calculate the Macaulay duration of Annuity B at the time of purchase is 1.369.

Step-by-step explanation:

First, we use 0.93 to calculate the v which equals 1/(1+i).

= 0.93

After rearranging the equation, we get 1.07 + 0.07v - 0.93=0

So, v=0.9

Mac D:

After substituting the value of v, we get Mac D = 1.369.

answer: 1 and 3

step-by-step explanation:

a is the correct