Question: Consider a 3-year 11% coupon bond with a face value of $100. Suppose that the yield on the bond is 12% per annum with continuous

Consider a 3-year 11% coupon bond with a face value of $100. Suppose that the yield on the bond is 12% per annum with continuous compounding. The bond pays coupon every 6 months. Use the modified duration to calculate the effect on the bonds price for a 0.1% increase in its yield.

A $90.12

B $96.42

C $94.73

D $98.32

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