James bought shares in a investment grade bond fund assume, Financial Management

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James bought shares in a investment grade bond fund assume

James bought shares in a investment grade bond fund. Assume that modified duration of the bonds in the portfolio is 14 years. The average maturity of the bonds is 23.5 years and the fund has a YTM of 4%. If the NAV of the fund’s shares is $10, if the fund's yield drops to 3.86%, what is the approximate gain/loss?

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Financial Management: James bought shares in a investment grade bond fund assume

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Financial Management: James bought shares in a investment grade bond fund assume

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