What is the modified duration of the bond

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You are the Portfolio Manager and you have decided to invest in a bond with a 10 percent coupon and a 4-year maturity currently priced at par with interest paid annually. Your interest rate outlook is that rares will continue to fall and so you need to know whether this particular bond is suited for your portfolio.a) Given your interest rate outlook, State what kinds of bonds you want in your portfolio in terms of duration and explain your reasoning for this choice. b) Calculate the duration of this bond   c) Why does the coupon rate affect the volatility of bond price? d) You decided to purchase the bond for your portfolio, but now interest rates have risen by 100 basis points, what is the modified duration of the Bond

Reference no: EM131078115

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