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Question
The following information is about current spot rates for Second Duration Savings' assets (loans) and liabilities (CDs). All interest rates are fixed and paid annually.
What is the duration of the two-year loan (per $100 face value) if it is selling at par?
A. 2.00 years
B. 1.92 years
C. 1.96 years
D. 1.00 year
E. 0.91 years
Answer
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