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A one-year, 8% coupon bond offers an annual yield of 13% with continuous compounding and makes quarterly coupon payments. First, calculate the bonds duration. Then,

A one-year, 8% coupon bond offers an annual yield of 13% with continuous compounding and makes quarterly coupon payments. First, calculate the bonds duration. Then, use the duration to approximate the new price of the bond when there is an increase of 25 basis points in the bonds yield. Assume that the face value of the bond is $1,000.

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