At an annual effective interest rate of 5.1%, Asset A has a modified duration of 20.3 and a price of 1800. At the same rate, Asset B has a modified duration of 18.6 and a price of 1400. As a result of a change in the interest rate, the price of Asset A increases by an amount of X and the price of Asset B increases by X - 89. Estimate the new annual effective rate.

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Calculate the change in price for Asset A Change in price Modified duration Chang... View the full answer