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Posted on Jul 30, 2024

A 3 - year bond with semiannual coupons has a duration of 2 . 7 3 4 2 years. The current yield on the bond

3 -

year bond with semiannual coupons has a duration of

2.7342

years. The current yield on the bond is

6 %

convertible semiannually.

Use a MacD approximation to estimate the new interest rate, convertible semiannually, that would give a price

increase of

5 % .

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