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Use the table below for the questions that follow, and assume semi-annual interest payments. Bond A B Coupon Rate 6% Zero coupon Yield 4.5% 6.25%
Use the table below for the questions that follow, and assume semi-annual interest payments. Bond A B Coupon Rate 6% Zero coupon Yield 4.5% 6.25% Maturity 3 years 7 years Based on your answer for the duration of Bond A, what is the duration predicted dollar price change for a 1% increase in interest rates? Remember, positive and negative signs matter!
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