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5. A corporate bond has a 8% coupon rate with annual coupon payments, 5 years of maturity, currently selling at par. a. what is the

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5. A corporate bond has a 8% coupon rate with annual coupon payments, 5 years of maturity, currently selling at par. a. what is the duration of this bond? b. What will be the estimated bond price volatility using duration based estimation formula, if interest rates increase 0.5%? c. What will be the bond price volatility using bond price volatility equation, if interest rates increase 0.5% ? Compare the result with the estimated percentage change in the bond price in part b. 5. A corporate bond has a 8% coupon rate with annual coupon payments, 5 years of maturity, currently selling at par. a. what is the duration of this bond? b. What will be the estimated bond price volatility using duration based estimation formula, if interest rates increase 0.5%? c. What will be the bond price volatility using bond price volatility equation, if interest rates increase 0.5% ? Compare the result with the estimated percentage change in the bond price in part b

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