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Yrs to Maturity (1) Bond Price (K d = 8%) (2) % chg in price when K d by 2% (3)=[(4)-(2)]/(2) Bond Price (K

Yrs to Maturity

(1)

Bond Price
(Kd = 8%)

(2)

% chg in price when Kd ­ by 2%

(3)=[(4)-(2)]/(2)

Bond Price
(Kd = 10%)

(4)

% chg in price when Kd ­ by 2%

(5)= [(6)-(4)]/(4)

Bond Price
(Kd = 12%)

(6)

10

1,134.20

-11.83%

1,000

-11.3%

887.00

7

1,104.13

-9.43%

1,000

-9.13%

908.72

5

1,079.85

-7.39%

1,000

-7.21%

927.90

4

1,066.24

-6.21%

1,000

-6.07%

939.25

0

1,000

0%

1,000

0%

1,000

Calculate the percentage change in bond price when Kd increases from 8% to 10%. Show your work.

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