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Suppose you have a 10-year bond (the bond will mature in 10 years), with a coupon rate of 2.45%. Coupons are paid on a semi-annual

Suppose you have a 10-year bond (the bond will mature in 10 years), with a coupon rate of 2.45%. Coupons are paid on a semi-annual basis. The value face value of the bond is $1000. Assume that the yield to maturity of the bond suddenly goes from 2.13% to 2.63%. 

What is the impact on the price of the bond percentage ?

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SOLUTION To calculate the price of the bond we can use the following formula P C 1 r1 C 1 r2 C 1 rn ... blur-text-image

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