Estimate the price of the bond

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A 12-year bond pays annual coupons of 4%. The face amount of the bond is 1000 and the redemption amount is 110% of the face amount. The yield-to-maturity of the bond is 3% annually.

Using the first order modified approximation, estimate the price of the bond if the yield to maturity increases to 3.1% annually.

Reference no: EM132703651

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