Consider a 5.00% coupon bond with a maturity date of 10/1/2028. If the bond is...
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Consider a 5.00% coupon bond with a maturity date of 10/1/2028. If the bond is purchased for settle on 10/12/2020 at a yield of 4.00%, it has a modified duration of 6.579. What is the current price? What is the expected price of the bond (due to duration) if rates increase 100 basis points? What is the actual price change? Why are they different?
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