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A perpetuity has a level payment at the end of each year. The annual effective interest rate is 5.2%. Calculate the Macaulay duration and the

A perpetuity has a level payment at the end of each year. The annual effective interest rate is 5.2%. Calculate the Macaulay duration and the Macaulay convexity. Use these to estimate the percentage decline in the market value of the perpetuity if the annual effective interest rate increases by 50 basis points.

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