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Consider a bond with a coupon of 5.6 percent, 10 years to maturity, and a current price of $1,057.70. Suppose the yield on the bond

Consider a bond with a coupon of 5.6 percent, 10 years to maturity, and a current price of $1,057.70. Suppose the yield on the bond suddenly increases by 2 percent.

(Using Excel and list the function)

a. Use duration to estimate the new price of the bond.

b. Calculate the new bond price using the usual bond pricing formula.

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