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A financial firm holds a bond in its investment portfolio whose duration is 15 years. Its current market price is

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A financial firm holds a bond in its investment portfolio whose duration is 15 years. Its current market price is $975. While market interest rates are currently at 6 percent for comparable quality securities, a decrease in interest rates to 5.75 percent is expected in the coming weeks. What change (in percentage terms) will this bond’s price experience if market interest rates change as anticipated?

Portfolio
A portfolio is a grouping of financial assets such as stocks, bonds, commodities, currencies and cash equivalents, as well as their fund counterparts, including mutual, exchange-traded and closed funds. A portfolio can also consist of non-publicly...

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Bank Management and Financial Services

Bank Management and Financial Services

ISBN: 978-0078034671

9th edition

Authors: Peter Rose, Sylvia Hudgins

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Question Posted: October 31, 2014 10:33:33
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