Currently I am studying for my Banking, Insurance & Risk exam and I cant get past one question.
What is the duration of a 2 year 30M loan @ 3% and 3 year 50M loan @ 7% (both assets). The yield curve is flat and currently 1,75%. The answer should be 2.06, however, no matter what method I use, I can not get to that answer.
I really hope someone can help me.
Thanks in advance