Volumn 4, In exhibit 4, on page 54, all are semi and so we have to multiply or divide by 2? I am not clear about this.
If you are mention the “PV of Cash Flow” column, the calculation for time 1 is:
3,323,625/(1+0,018804)1 = 3,262,282
Just used the semi-annual directly
Thanks for your response. That is exactly my q. We use semi annual to calculate the payments, then why do we the divide by 2-not multiply by two? e.g. the 6th column is showing a total of 12.0008 as MaCauley duration. Then we divide by 2 -why?
Because we are using a full period for the semester, instead of half period.
Each period, the weight is multiplied by 1, 2,…,20. if you just change to 1/2, 2/2, …20/2; then you will get straight the 6.0004