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A bond that pays interest annually has a 6 percent promised yield and a price of $1,025. Annual interest rates are now projected to fall

  1. A bond that pays interest annually has a 6 percent promised yield and a price of $1,025. Annual interest rates are now projected to fall 50 basis points. The bond's Macaulay duration is six years. Find the predicted new bond price after the interest rate change using the duration rule.

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