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Question
A $1,000 six-year Eurobond has an 8 percent coupon, is selling at par, and contracts to make annual payments of interest. The duration of this bond is 4.99 years. What will be the new price using the duration model if interest rates increase to 8.5 percent?
A. $23.10.
B. $976.90.
C. $977.23.
D. $1,023.10.
E. -$23.10.
Answer
This answer is hidden. It contains 52 characters.
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