Estimate of the percent price change due to duration alone

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Reference no: EM132024348

A 8.4% coupon bearing bond that pays interest semi-annually has a yield to maturity of 7.1% per year. If the bond has a duration of 12.6 years and the market yield decreases 59 basis points, calculate an estimate of the percent price change due to duration alone. (Answer to the nearest hundredth of a percent, i.e. 1.23 but do not use a % sign).

Reference no: EM132024348

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