What is the bond modified duration

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Reference no: EM132073490

An investor is considering purchasing a Treasury bond with a 16-year maturity, a 6% coupon and a 7% required rate of return. The bond pays interest semiannually.

a) What is the bond's modified duration?

b) If annual promised yields decrease 30 basis points immediately after the purchase, what is the predicted price change in dollars based on the bond's duration?

Reference no: EM132073490

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