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8 Assume there is a bond with a $1,000 par value and 13 percent coupon rate, three years remaining to maturity, and a 11 percent
8 
Assume there is a bond with a $1,000 par value and 13 percent coupon rate, three years remaining to maturity, and a 11 percent yield to maturity. Then, the IRS changes and required rate of return increases to 12%. Please estimate the percentage change in bond price by using the modified duration formula first. And then compare it to actual percentage change in price. (Calculate also the actual price change) Show all your steps clearly. (use fx button to write math formulas if needed) TTTT . A . O . T. XD0QB ETT. --- Ol. .. M om Step by Step Solution
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Quantitative Investment Analysis
Authors: Richard A. DeFusco, Dennis W. McLeavey, Jerald E. Pinto, David E. Runkle
3rd edition
111910422X, 978-1119104544, 1119104548, 978-1119104223
