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Section C (4 Mark)A 14% semiannual-pay coupon bond has six years to maturity.

Section C (4 Mark)

A 14% semiannual-pay coupon bond has six years to maturity. The bond is currently trading at par. Using a 25 basis point change in yield, the effective duration of the bond is closest to:

A.

0.389

B.

3.889

C.

3.97

D.

None of the above

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