Calculate the new bond price

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Consider a 6.2 percent coupon bond with five years to maturity and a current price of $1,064.70. Suppose the yield on the bond suddenly increases by 2 percent.

a. Use duration to estimate the new price of the bond. (Do not round intermediate calculations. Round your answer to 2 decimal places. Omit the "$" sign in your response.)

Price $

b. Calculate the new bond price. (Do not round intermediate calculations. Round your answer to 2 decimal places. Omit the "$" sign in your response.)

Reference no: EM131547589

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