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Question
An FI purchases at par value a $100,000 Treasury bond paying 10 percent interest with a 7.5 year duration. If interest rates rise by 4 percent, calculate the bond's new value.
Recall that Treasury bonds pay interest semiannually. Use the duration valuation equation.
A. $28,572
B. $20,864
C. $15,000
D. $22,642
E. $71,428
Answer
This answer is hidden. It contains 64 characters.
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