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What would be the bond market value

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New South Wales Treasury has issued $1,000 face value, 4-year bonds that pay annual coupons at a rate of 9 per cent. The market interest rate is currently at 9%.

Part a) What would be the bond's market value (price)?

Part b) Calculate the duration of the bonds.

Part c) The market interest rates increased sharply just after the issue. What is the percentage change in price if market rate is 9.5 per cent. What is the new price?

Reference no: EM132534776

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