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Question
Consider Example 18-11 and Table 18-1. What happens to the duration if the coupon rate was 6%, rather than the 5% shown?a No change - duration is based time to maturity
b The duration increases to 4.57, as the YTM increases
c The duration decreases to 4.38, as more payments come earlier
d The YTM is set by the market, so it will not change.
Answer
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