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Consider a two year bond with a 4% annual coupon and a face value of $100. The current yield is 4%. 1. What is the

Consider a two year bond with a 4% annual coupon and a face value of $100. The current

yield is 4%.

1. What is the price of the bond?

2. What is the Duration of the bond?

3. If the yield rises to 5%, what is the bond price according to Duration?

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