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Question
A 20-year annual coupon bond is currently selling for its par value of $10,000 with an annual yield of 7%. If the bond is callable at par, what is the effective duration of the bond, assuming rates change by 2%?a. 25.00 years
b. 20.00 years
c. 5.52 years
d. 4.56 years
e. 3.68 years
Answer
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