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An investor bought a bond at ₱8,000 and the bond yields 12%. Using a 10 basis point change in yield, it is calculated that the decrease in yield results to a bond price of ₱8,400 while an increase the decrease in yield results to a bond price of ₱7,800. The effective duration would be closest to:   a. 12.50 b. 25.00 c. 38.46 d. 37.50 e. 35.71

An investor bought a bond at ₱8,000 and the bond yields 12%. Using a 10 basis point change in yield, it is calculated that the decrease in yield results to a bond price of ₱8,400 while an increase the decrease in yield results to a bond price of ₱7,800. The effective duration would be closest to:   a. 12.50 b. 25.00 c. 38.46 d. 37.50 e. 35.71

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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An investor bought a bond at ₱8,000 and the bond yields 12%. Using a 10 basis point change in yield, it is calculated that the decrease in yield results to a bond price of ₱8,400 while an increase the decrease in yield results to a bond price of ₱7,800. The effective duration would be closest to:
 
a. 12.50
b. 25.00
c. 38.46
d. 37.50
e. 35.71
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