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A 3-year bond with a face value of $100 makes annual coupon payments of 10%. The current interest rate is 9%. 1. Find the bond's

A 3-year bond with a face value of $100 makes annual coupon payments of 10%. The current interest rate is 9%. 1. Find the bond's current price. 2. Suppose the interest rate changes to 10%, determine the new price of the bond by direct calculation. 3. Instead of direct calculation, use duration to estimate the new price and compare it to the correct price. 4. Use convexity to improve on your estimation using duration.

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