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A 1 0 0 par value bond paying a 5 % coupon, matures in 3 years. This bond currently yields 4 . 5 0 %

100

par value bond paying a

5 %

coupon, matures in

3

years. This bond currently yields

4.50 % .

What is the price of the bond using Duration and Convexity if the yield falls to

3.00 % ?

Use

100

par value in your calculation.

Round to

3

decimal places.

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