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(a) Fill in the table and determine the price and duration of a bond with a maturity of 4 years, $100 face value, paying a

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(a) Fill in the table and determine the price and duration of a bond with a maturity of 4 years, $100 face value, paying a 8% coupon annually, and trading at a yield to maturity of 9%? Fill in the cells of the table + (28 marks T Cashflow Discount factor PV Proportion of T x Proportion of total PV- (Year) total Pve - UM SUMA Price Duration (b) Use the duration of the bond that you have calculated in 4(a) to predict the change in the bond price if interest rates rise by 100 basis points. (6 marks)

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