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3. a) Compute the modified duration of a 10% coupon, 3-year corporate bond with a yield to maturity 8%. b) Using the modified duration, If

3. a) Compute the modified duration of a 10% coupon, 3-year corporate bond with a yield to maturity 8%. b) Using the modified duration, If the market yield drops by 15 basis points, there will be a __________% (increase/decrease) in the bond's price.

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