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Now suppose the market interest rate on comparable bonds

Question - Calculate the value of duration for a four-year, $1,000 par value U.S. government bond purchased today at a yield to maturity of 15 percent. The bond's coupon rate is 12 percent, and it pays interest at year's end. Now suppose the market interest rate on comparable bonds falls to 14 percent. What percentage change in this bond's price will result?

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Accounting Basics: Now suppose the market interest rate on comparable bonds

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Accounting Basics: Now suppose the market interest rate on comparable bonds

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