An investor wants to find the duration of a(n) 10-year, 7% semiannual pay, noncallable bond that's currently priced in the market at $629.21, to yiel duration of this bond (Hint: use Equation 11.11). The new price of the bond if the market interest rate decreases by 100 basis points (or 1%) is $. (Round to the nearest cent.)

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
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An investor wants to find the duration of a(n) 10-year, 7% semiannual pay, noncallable bond that's currently priced in the market at $629.21, to yield 14%. Using a 100 basis point change in yield, find the effective
duration of this bond (Hint: use Equation 11.11).
The new price of the bond if the market interest rate decreases by 100 basis points (or 1%) is $
(...)
(Round to the nearest cent.)
Transcribed Image Text:An investor wants to find the duration of a(n) 10-year, 7% semiannual pay, noncallable bond that's currently priced in the market at $629.21, to yield 14%. Using a 100 basis point change in yield, find the effective duration of this bond (Hint: use Equation 11.11). The new price of the bond if the market interest rate decreases by 100 basis points (or 1%) is $ (...) (Round to the nearest cent.)
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