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Consider an annual-pay bond that is trading at 93.75 per 100 of par. The duration of the bond is 7.25 and its convexity is 34.

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Consider an annual-pay bond that is trading at 93.75 per 100 of par. The duration of the bond is 7.25 and its convexity is 34. Compute the percentage change in the price of the bond if a credit rating downgrade results in its' spread relative to the benchmark increasing by 25 basis points

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