What is the duration of a two-year bond

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Use the following to answer the next two questions.

What is the duration of a two-year bond that pays an annual coupon of 12 percent and has a current yield to maturity of 14 percent? Round your answer to four decimal places.

What would be the percentage change in the value of the bond mentioned in the previous question if interest rates increase by 75 basis points? Round intermediate steps and your final answer to four decimals. Enter your answer in decimal format (EX: .XXXX).

Reference no: EM132233484

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