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Consider a three-year 8% coupon bond with a face value of $100. Suppose that the yield to maturity on the bond is 12% per annum
Consider a three-year 8% coupon bond with a face value of $100. Suppose that the yield to maturity on the bond is 12% per annum and that coupon payments are made every six months. You may round any calculation to the nearest cent.
A) Find the duration of this bond in years, showing all work.
B) Using duration find the percentage change in bond value from an increase in yield to maturity of .20%.
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