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What is the new price of the bond

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Reference no: EM132908307

Question - You find a bond with 28 years until maturity that has a coupon rate of 10.5 percent and a yield to maturity of 10 percent. Suppose the yield to maturity on the bond increases by .25 percent.

a. What is the new price of the bond using duration and using the bond pricing formula?

b. Now suppose the original yield to maturity is increased by 1 percent. What is the new price of the bond?

Reference no: EM132908307

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