A bank holds a bond in its investment portfolio whose


Question: A bank holds a bond in its investment portfolio whose duration is 13.5 years. Its cur-rent market price is $1,020. While market interest rates are currently at 8 percent for comparable quality securities, a decrease in interest rates to 7.25 percent is expected in the coming weeks. What change (in percentage terms) will this bond's price experience if market interest rates change as anticipated?

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Finance Basics: A bank holds a bond in its investment portfolio whose
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