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A bond has a duration of 8 years and YTM of 6% (compounded semiannually). What is the Modified Duration? A bond has a modified duration

  1. A bond has a duration of 8 years and YTM of 6% (compounded semiannually). What is the Modified Duration?
  2. A bond has a modified duration of 6.5 years. What is the change in bond price if YTM decreases by 100 basis points (i.e. 1%)? Pay close attention to if your answer is positive or negative based on this decrease in YTM.

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