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Estimate the approximate percentage change

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Reference no: EM133071430

A corporate bond portfolio has a modified duration of 5.35. Current interest rates are flat at 4.0%.  

  1. Estimate the approximate percentage change in the value of the portfolio if interest rates rise to 5.25%.
  2. Do fixed-rate bonds with specific stated maturities have positive or negative convexity? Is this a good or bad thing?
  3. Calculate the Macaulay duration of a 4-year, 3% coupon annual pay bond assuming current interest rates are flat at 4.625%

Reference no: EM133071430

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