You just purchase a coupon bond with a face value of 1000 6, Business Economics

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You just purchase a coupon bond with a face value of 1000 6

You just purchase a coupon bond with a face value of $1000, 6% coupons, and three years remaining to maturity. Assume that all markets are 7% A) what is the duration of this bond B) Compute the exact price change(using the present value formula) if interest rates drop to 6.75% C) Use the duration to compute the approximate price change due to a drop in interest rates to 6.75%. How large is the approximate error (in dollars)?

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Business Economics: You just purchase a coupon bond with a face value of 1000 6

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