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Consider a 12-year $1,000 face bond with a coupon rate of 2.5%, a ytm of 3%, and a price of 949.92. The bond pays coupons

Consider a 12-year $1,000 face bond with a coupon rate of 2.5%, a ytm of 3%, and a price of 949.92. The bond pays coupons semi-annually and has a duration of 10.39 years. 1) What is this bond's modified duration? Now suppose the bond's ytm decreases to 2%. 2) Using modified duration, approximately what will be the bond's new price?

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