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Calculate the expected change in the price

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An 8%, 30-year corporate bond was recently being priced to yield 10%. The Macaulay duration for the bond is 10.20 years. The modified duration is 10.2 / 1.1 = 9.27

a) Calculate the expected change in the price of the bond if market interest rates FALL by 1.25%

b) Calculate the expected change in the price of the bond if market interest rates RISE by .5%

Reference no: EM132154643

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