Question: Ch. 10: Bond Valuation Saved 7 Consider a bond with a coupon of 8.6 percent, twelve years to maturity, and a current price of $1,043.70.

Ch. 10: Bond Valuation Saved 7 Consider a bond with a

Ch. 10: Bond Valuation Saved 7 Consider a bond with a coupon of 8.6 percent, twelve years to maturity, and a current price of $1,043.70. Suppose the yield on the bond suddenly increases by 2 percent. 10 points a. Use duration to estimate the new price of the bond. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Price 914.14 eBook Print b. Calculate the new bond price using the usual bond pricing formula. (Do not round Intermediate calculations. Round your answer to 2 decimal places.) References Price 902.08

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