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A) Calculate the duration of a EUR 1000 5% coupon bond with a maturity of four years. Suppose the market interest rate is 6%? B)

A) Calculate the duration of a EUR 1000 5% coupon bond with a maturity of four years. Suppose the market interest rate is 6%?

B) If the price level recently increased by 20% in England while falling by 5% in the United States, how much must the exchange rate change if PPP holds?Assume that the current exchange rate is 0.55 pounds per dollar.

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