[Solved] 7. Calculate the duration of a $1,000 6%

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7. Calculate the duration of a $1,000 6% coupon bond with three years to maturity. Assume that all market interest rates are 7%. 8. Consider

7. Calculate the duration of a $1,000 6% coupon bond with three years to maturity. Assume that all market interest rates are 7%.

8. Consider the bond in the previous question. Calculate the expected price change if interest rates drop to 6.75% using the duration approximation. Calculate the actual price change using discounted cash flow.

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