A 30-year bond with an annual coupon of 12% and a yield-to-maturity of 8% yield...
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Finance
A 30-year bond with an annual coupon of 12% and a yield-to-maturity of 8% yield has a duration of 11 547 years. Use the duration concept to estimate the percentage change in the price of the bond if the yield were to fall to 7%. By how much would you be under- or over-estimating the change? Explain the source of the under-or over-estimation when using the duration concept
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