d with a Macaulay duration of 12.74 and a price of 65,000.
The price and Macaulay duration for both bonds were calculated using an annual effective
interest rate of 4.32%
Bailey estimates the value of this portfolio at an interest rate of i using the first-order Macaulay approximation to be 105,000.
Determine i.
A. 3.49%
B. 3.62%
C. 3.85%
D. 3.92%
E. 4.03%

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