Question
1)Consider a bond selling at par with modified duration of 22-years and convexity of 415. If the yield decreases by 2%, what would be the
1)Consider a bond selling at par with modified duration of 22-years and convexity of 415. If the yield decreases by 2%, what would be the percentage price change according to the duration-with-convexity rule?
| 44% | ||
| 52.3% | ||
| 60.6% | ||
| 80% |
2)Bond A has an 8-year duration and is priced at $1,070. Its yield to maturity is 9%. If the yield to maturity falls to 8.42%, you would predict that the new value of the bond will be approximately ________.
| $1,024.5 | ||
| $1,070.0 | ||
| $1,115.5 | ||
| $1,160.1 |
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Passive Income The Passive Income Millionaire
Authors: Alexus Arellano
1st Edition
9814950882, 978-9814950886
