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The fixed income nature of bonds implies that the price of these securities is highly sensitive to interest rate changes. For the following bond

The fixed income nature of bonds implies that the price of these securities is highly sensitive to interest rate changes. For the following bond – a three-year $1,000 bond with a 8% annual coupon with a market interest rate, or YTM of 3%, 1) calculate the duration for the bond and 2) assuming interest rates rise to 5%, what is the approximate impact to the bond price?

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