A 10-year annual coupon bond is currently selling for its par value of $1,000 with an annual yield of 5%.If the bond is callable at par, what is the effective duration of the bond, assuming rates change by 1%?
A) 10 years
B) 7.36 years
C) 5.52 years
D) 4.60 years
E) 3.68 years
Correct Answer:
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