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Mathematics, 23.10.2021 14:00 fahad7007

The bond has a coupon rate of 6.4%, pays interest annually, has a face value of £1,000 4 years to maturity, and a yield to maturity of 7.2% . you expect that interest rates will rise by 80 basis later today. a.) calculate the initial price of bond and the modified duration of bond.

b.) use the modified duration to find the approximate percentage change in the bond's price and the new price of the bond.

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