A bond with a yield to maturity of 7.4 percent is currently selling for $1,120. If the Macaulay duration of the bond is 9.12 years, what is the predicted new price of the bond if interest rates decrease by one percent?
A) $1,138.64
B) $1,218.50
C) $1,197.23
D) $1,176.52
E) $1,161.08
Correct Answer:
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