I have a question about the weight calculation. For the weights I got

w_{1} = .0556

w_{2} = .0514

w_{3} = .8415

Am I wrong? If so, how do you get the weights from the answer key?

An investor buys a 6% annual payment bond with three years to maturity. The bond has a yield-to-maturity of 8% and is currently priced at 94.845806 per 100 of par. The bond’s Macaulay duration is *closest* to:

- 2.62.
- 2.78.
- 2.83.

**C is correct.** The bond’s Macaulay duration is closest to 2.83. Macaulay duration (MacDur) is a weighted average of the times to the receipt of cash flow. The weights are the shares of the full price corresponding to each coupon and principal payment.

**Period**** Cash Flow ** Present Value** Weight **

**Period × Weight**1 6 5.555556 0.058575 0.058575 2 6 5.144033 0.054236 0.108472 3 106 84.146218 0.887190 2.661570 94.845806 1.000000 2.828617