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3) The Macaulay duration of a bond portfolio is 6.23 years, (assuming they pay coupon annually) and the yield to maturity of the bond portfolio

3) The Macaulay duration of a bond portfolio is 6.23 years, (assuming they pay coupon annually) and the yield to maturity of the bond portfolio is 14%. What is the approximate change in the value of the bond if interest rates increase by 3 percentage points (3%)?

Increase by 18.55%

Decrease by 18.55%

Increase by 16.39%

Decrease by 16.39%

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