Question: A bond currently worth $200,000 has a Macaulay duration( D ) equal to 12.64 years when j 2 = 6%. If the interest rate falls

A bond currently worth $200,000 has a Macaulay duration(D) equal to 12.64 years when j2 = 6%.

If the interest rate falls to j2 = 5.5%, what is the estimated new value of the bond? (nearest dollar)
  • A.

    $187,728

  • B.

    $212,640

  • C.

    $212,302

  • D.

    $212,272

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