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What is the expected change in the price of the bond

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Reference no: EM131633663

Question: Consider the following. ( LG 22-3 )

a. What is the duration of a two-year bond that pays an annual coupon of 10 percent and whose current yield to maturity is 14 percent? Use $1,000 as the face value.

b. What is the expected change in the price of the bond if interest rates are expected to decline by 0.5 percent?

Reference no: EM131633663

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