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MLK Bank has an asset portfolio that consists of $ 1 0 0 million of 3 0 - year; 1 0 percent annual coupon, $

MLK Bank has an asset portfolio that consists of $100 million of 30-year; 10 percent annual coupon, $1,000 bonds that sell at par.
a-1. What will be the bonds' new prices if market yields change immediately by +-010 percent?
a-2. What will be the new prices if market yields change immediately by +-2.00 percent?
b-1. The duration of these bonds is 10.3696 years. What are the predicted bond prices in each of the four cases using the duration
rule?
b-2. What is the amount of error between the duration prediction and the actual market values?
Complete this question by entering your answers in the tabs below.
Required BI
Required B2:
What is the amount of error between the duration prediction and the actual market values? (Do not round intermediate
calculations. Enter all answers as positive numbers. Round vour answers to 2 decimal places. (e.Q.,32.16))
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