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| rev | Admin | (Created page with "'''Solution: B''' The Macaulay duration of Annuity A is <math display = "block"> 0.93=\frac{0(1)+1( v)+2( v^{2})}{1+ v+ v^{2}}=\frac{ v+2 v^{2}}{1+ v+ v^{2}} </math> , which leads to the quadratic equation <math display = "block"> 1.07v^2 + 0.07v -0.93 = 0. </math> The unique positive solution is v = 0.9. The Macaulay duration of Annuity B is <math display = "block"> {\frac{0(1)+1( v)+2( v^{2})+3( v^{3})}{1+ v+ v^{2}+ v^{3}}}=1.369 </math> {{soacopyright | 2023 }}") | Nov 20'23 at 12:10 | +476 |