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A non-callable 3-year UK government bond pays semi-annual coupons. The face value is 10,000, the annual coupon rate is 2% and the annual yield to

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A non-callable 3-year UK government bond pays semi-annual coupons. The face value is 10,000, the annual coupon rate is 2% and the annual yield to maturity is 14% per year. (a) Show clearly how the annual modified duration is calculated from the data above and explain how the modified duration can be used to estimate a price change resulting from a change in yield

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