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Section B (2 Mark)As a CWM you are considering the following bond for inclusion in...

Section B (2 Mark)

As a CWM you are considering the following bond for inclusion in the fixed income portfolio of your client:

What will be the duration of this bond? and What will be the effect of the changes on the duration of the bond if the coupon rate is 6% rather than 9%?

A.

8 years, Increase

B.

7.33 years, Decrease

C.

6.031 years, Increase

D.

7.012 Years, Decrease

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