The bond approximate modified duration

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Reference no: EM131999496

An investor buys a two-year bond with a 6% coupon rate paid semi-annually. The bond, with a yield to maturity of 7% is purchased at a price of 98.16346 per 100 of par value. Assume a 5 bp change in yield-to-maturity. Create the calculation, using values, for the bond’s approximate modified duration. In other words, use the formula for the approximation rather than for the actual duration calculation. (Not with excel)

Reference no: EM131999496

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