Calculate the modified duration of bond

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Reference no: EM132696046

A four-year coupon bond with annual coupon rate of 5% is currently selling at a yield to maturity of 6%.

(a) Calculate the modified duration of this bond.

(b) What is the predicted dollar price change of this bond using modified duration, assuming that its yield to maturity decreases by 0.5%?

Reference no: EM132696046

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