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Duration of a bond Explain what the duration of a bond is and calculate the duration of the following four- year, 7% coupon bond. The

Duration of a bond

Explain what the duration of a bond is and calculate the duration of the following four- year, 7% coupon bond. The spot interest rates for years 1, 2, 3 and 4 are 4.5%, 5%, 5.5% and 6%, respectively. (7 marks

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