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A bond has a Macaulay duration of 7.50 and is priced to yield 5.5%. If interest rates go up so that the yield goes to
A bond has a Macaulay duration of 7.50 and is priced to yield 5.5%. If interest rates go up so that the yield goes to 6.0 %, what will be the percentage change in the price of the bond? Now, if the yield on this bond goes down to 5%, what will be the bond's percentage change in price? Comment on your findings. Round answers to 2 decimal places
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