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( Economic Interpretation of Duration ) The duration of an 1 1 - year, $ 1 , 0 0 0 Treasury bond paying a 1

(

Economic Interpretation of Duration

)

The duration of an

11 -

year, $

1, 000

Treasury bond

paying a

10

percent semiannual coupon and selling at par has been estimated at

6.763

years.

.

What is the modified duration of the bond? What is the dollar duration of the bond?

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