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a. Peter buys a 5% annual coupon bond with 4 years to maturity. The bond has a yield-to-maturity of 6%. The par value is $1,000.

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a. Peter buys a 5% annual coupon bond with 4 years to maturity. The bond has a yield-to-maturity of 6%. The par value is $1,000. i. Calculate the duration and modified duration of the bond. ( 5 marks) ii. If the yield increases to 7.5%, what is the new bond price using the duration concept

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