Question: While the annual effective yield is 7%, Meredith purchases a 3-year bond that pays annual coupons with a coupon rate of 5% and a face

While the annual effective yield is 7%, Meredith purchases a 3-year bond that pays annual coupons with a coupon rate of 5% and a face amount of $100. Immediately after the purchase, the annual effective yield increases to 7.3%. a.) Estimate the new price of the bond using the first-order modified approximation b.) Estimate the new price of the bond using the first order Macaulay approximation

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