Calculate the new bond price

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Reference no: EM13271471

Consider a 8.80 percent coupon bond with five years to maturity and a current price of $956.20. Suppose the yield on the bond suddenly increases by 2 percent.

1. Use duration to estimate the new price of the bond. (Round your answer to 2 decimal places. Omit the "tiny_mce_markerquot; sign in your response.)

2. Calculate the new bond price.

Reference no: EM13271471

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