An investor buys a three-year bond with a 5% coupon rate paid annually. The bond, with a
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An investor buys a three-year bond with a 5% coupon rate paid annually. The bond, with a yield-to-maturity of 3%, is purchased at a price of 105.657223 per 100 of par value. Assuming a 5-basis point change in yield-to-maturity, the bond’s approximate modified duration is closest to:
A. 2.78.
B. 2.86.
C. 5.56.
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To calculate the approximate modified duration for the bond you can use the following formula Modifi...View the full answer
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