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An 4% annual coupon bond with (face value = 5,000) currently trades at par. Its Macaulay duration is 4.6 years and its convexity is 54.35.

An 4% annual coupon bond with (face value = 5,000) currently trades at par. Its Macaulay duration is 4.6 years and its convexity is 54.35. Suppose yield goes from 3.73% to 3.85% one day. Calculate the approximate dollar change in price using both duration and convexity. Assume annual compounding.

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