What will be the new price of the bond

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(A) Consider a corporate bond (with $ 1,000 par value) that has 23 years to maturity, 5% coupon rate, and 4% yield to maturity (YTM). The interest on his bond is paid semiannually. Find the duration of this bond.

(B) If the bond’s yield to maturity (YTM) increases by 50 basis points, what will be the new price of the bond? Please use the duration you obtained to determine the new price.

Reference no: EM131849164

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