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You are considering a year 1 0 0 , 0 0 0 bond that pays a 5 % coupon rate annualy and has YTM of

You are considering a year

100, 000

bond that pays a

5 %

coupon rate annualy and has YTM of

4 %

the YTM decreases by

50

basis points immediately, what is the actual percentage change for the bond

?

I know the correct answer is

2.58 %

but please show me each step to get this solution

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