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A bond has a Macaulay duration of 7. The yield is 7%. What is the modified duration? If the bond is priced at 100 and

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A bond has a Macaulay duration of 7. The yield is 7%. What is the modified duration? If the bond is priced at 100 and rates decrease 50 bps, what is the bond price? Walk me through the steps. Note: In making this calculation, we ignored convexity. What is convexity and would convexity make the final price higher or lower than your answer above? ****

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