Consider a 860 percent coupon bond with twelve years to


Consider a 8.60 percent coupon bond with twelve years to maturity and a current price of $953.90. Suppose the yield on the bond suddenly increases by 2 percent.

1. Use duration to estimate the new price of the bond.

2. Calculate the new bond price.

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Financial Management: Consider a 860 percent coupon bond with twelve years to
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