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Problem 3: The price of a bond is $120 and its Macaulay Duration, D M , is 12.36 years. If rates increase from 6.0% to

Problem 3: The price of a bond is $120 and its Macaulay Duration, D M , is 12.36 years. If rates increase from 6.0% to 6.5% per annum compounded semiannually then find the approximate new price of the bond. Your final answer should be correct to 2 places after the decimal point. The approximate new price of the bond is ___________________.

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