Question: A bond currently sells for $950 based on a par value of $1000 and promises $100 in interest for 3 years before being retired. Yields

A bond currently sells for $950 based on a par value of $1000 and promises $100 in interest for 3 years before being retired. Yields to maturity on comparable-quality securities are currently at 12%. What is the bond’s duration? Suppose interest rates in the market fall to 10%. What will be the approximate percent change in the bond’s price?

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