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A bond has a 25 year maturity, 10% coupon, 10% yield, $1000 face value, a duration of 10 years and a convexity of 135.5. Calculate
A bond has a 25 year maturity, 10% coupon, 10% yield, $1000 face value, a duration of 10 years and a convexity of 135.5. Calculate the new value of the bond (in $), based on modified duration and convexity, if interest rates were to fall by 125 basis points.
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