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What is current duration

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1. A government bond currently carries a yield to maturity of 6 percent and a market price of $1,168.49. If the bond promises to pay $100 in interest annually for five years, what is its current duration?

2. Carter National Bank holds $15 million in government bonds having a duration of 12 years. If interest rates suddenly rise from 6 percent to 7 percent, what percentage change should occur in the bonds' market price?

Reference no: EM133111144

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