Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open.

How to calculate new price for bond if yield increases
Edited to incorporate the comments elsewhere of @Atkins Assuming, (apparently incorrectly) that duration is time to maturity: First, note that the question does not mention the coupon rate, the size of the regular payments that the bond holder will get each year.  So let's calculate that. Consider the cash flow described.  You pay out 1015 at the start of Year #1, to buy the bond.  At the end of Years #1 to #5, you receive a coupon payment of X.  Also at the end of Year #5, you receive the face value of the bond, 1000.  And you are told that the pay out equals the money received, using a time value of money of 4.69% So, if we use the date of maturity of the bond as our valuation date, we have the equation: Maturity + Future Value of coupons = Future value of Bond Purchase price 1000 + X *( (1 + .0469)^5-1)/0.0469 = 1015 * 1.0469^5 Solving this for X, we obtain 50.33;  the coupon rate is 5.033%.  You will receive 50.33 at the end of each of the five years.   Now, we can take this fixed schedule of payments, and apply the new yield rate to the same formula above;  only now, the unknown is the price paid for the bond, Y. 1000 + 50.33 * ((1 + 0.0487)^5 - 1) / .0487 = Y * 1.0487^5 Solving this equation for Y, we obtain: Y = 1007.08