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Suppose you have a callable bond with a call price of $1025 that is selling for $990.If the yield curve shifts up by .75% the
Suppose you have a callable bond with a call price of $1025 that is selling for $990.If the yield curve shifts up by .75% the bond price will fall to $930.If it shifts down by .75% the price will rise to the call price.Compute the bond's effective duration.
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