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A 12-Year, 8 Percent Bond with a YTM of 12

Question 17

Multiple Choice

A 12-year, 8 percent bond with a YTM of 12 percent has a Macaulay duration of 9.5 years. If interest rates decline by 50 basis points, what will be the percent change in price for this bond?


A) +4.48 percent
B) +4.61 percent
C) +8.48 percent
D) +8.96 percent
E) +17.92 percent

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