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The following three questions refer to the following information: 1.Calculate the price of a $1,000, 3% bond with 3 years to maturity with 4.5% market

The following three questions refer to the following information:

1.Calculate the price of a $1,000, 3% bond with 3 years to maturity with 4.5% market interest rates.

2.What is the duration of this bond?

3.Calculate the expected price change in $s if interest rates fall to 4.05% using the duration price approximation formula.

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