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A 3-year bond with face value $10000, yearly coupon at coupon rate 5% is issued today. a. ( 2 points) If the discount rate is
A 3-year bond with face value $10000, yearly coupon at coupon rate 5% is issued today. a. ( 2 points) If the discount rate is 12%, what is the present value for the coupons? b. (1 point) Hence, find the present value of the bond. c. (2 points) Find the duration of the bond. d. (2 points) Using the duration found in part (c), estimate the change in bond price when the discount rate is increased by a small 0.5%. e. ( 2 points) Find the exact bond price when the discount rate is 12.5%
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