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Suppose we are given a set of cashflows {Ct}t0. Let d0 denote the corresponding the...

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Accounting

Suppose we are given a set of cashflows {Ct}t0. Let d0 denote the corresponding the Macaulay duration D(i, ). Suppose in addition that there are no cashflows during the time [0, 3]. That is Ct= 0 for t [0, 3]. At time t = 1, Susan computes the Macaulay duration of the same cashflows. That is, she considers t = 1 as the present time, and a cashflow Ct at time t now becomes a cashflow Ct1 at time t 1 for her). Let d1 denote Susans answer. Show that d1 = d0 1.

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