Use duration to estimate the new price of the, Financial Management

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Use duration to estimate the new price of the

Consider a 7.40 percent coupon bond with six years to maturity and a current price of $940.10. Suppose the yield on the bond suddenly increases by 2 percent.

1. Use duration to estimate the new price of the bond. (Round your answer to 2 decimal places. Omit the "$" sign in your response.)

2. Calculate the new bond price. (Round your answer to 2 decimal places. Omit the "$" sign in your response.)

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