Question: Calculate the approximate modified duration given a change in yield of 50 basis points. For a 25-year, 5% semiannual pay bond currently trading at 6%.

Calculate the approximate modified duration given a change in yield of 50 basis points.

For a 25-year, 5% semiannual pay bond currently trading at 6%.

Time to Maturity

25 years

Coupon Rate (Interest Paid Semiannually)

8%

Effective Interest Rate

9%

Par Value

1,000

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