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Consider a 3% coupon bond with 2 years to maturity and a face value of $100. Assume the bond is trading at a yield of
Consider a 3% coupon bond with 2 years to maturity and a face value of $100. Assume the bond is trading at a yield of 8%. Approximate the percentage change in price using duration if yield goes down by 48 basis points. Coupons are paid semi-annually. Assume semi-annual compounding.
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