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A five - year bond with a yield of 1 1 % ( continuously compounded ) pays an 8 % coupon at the end of
A fiveyear bond with a yield of continuously compounded pays an coupon at the end of each year. Marks a What is the bonds price? b What is the bonds duration? c Use the duration to calculate the effect on the bonds price of a decrease in its yield.
A fiveyear bond with a yield of continuously compounded pays an coupon
at the end of each year. Marks
a What is the bonds price?
b What is the bonds duration?
c Use the duration to calculate the effect on the bonds price of a decrease in its
yield.
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