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XYZ Bank purchased a 3-year central bank bond that pays an annual coupon of 19%. The face value of the bond is US$5 million. i)

XYZ Bank purchased a 3-year central bank bond that pays an annual coupon of 19%. The face value of the bond is US$5 million.

i) What is the duration of this bond if the yield to maturity on the bond is 15%?

ii) Interpret your answer i

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