A 30-year maturity bond making annual coupon payments with a coupon rate of 15.5% has duration of 9.96 years and convexity of 144.6. The bond currently sells at a yield to maturity of 10%.

a.Find the price of the bond if its yield to maturity falls to 9%.(Do not round intermediate calculations. Round your answer to 2 decimal places.)

Price of the bond$

b.What price would be predicted by the duration rule?(Do not round intermediate calculations. Round your answer to 2 decimal places.)

Predicted price$

c.What price would be predicted by the duration-with-convexity rule?(Do not round intermediate calculations. Round your answer to 2 decimal places.)

Predicted price$

d-1.What is the percent error for each rule?(Enter your answer as a positive value. Do not round intermediate calculations. Round "Duration Rule" to 2 decimal places and "Duration-with-Convexity Rule" to 3 decimal places.)

Percent Error

YTM = 9%

Duration Rule: _____%

Duration-with-Convexity Rule: _____%

d-2.What do you conclude about the accuracy of the two rules? (A or B)

a. The duration rule provides more accurate approximations to the actual change in price.

b. The duration-with-convexity rule provides more accurate approximations to the actual change in price.

e-1.Find the price of the bond if it's yield to maturity rises to 11%.(Do not round intermediate calculations. Round your answer to 2 decimal places.)

Price of the bond$

e-2.What price would be predicted by the duration rule?(Do not round intermediate calculations. Round your answer to 2 decimal places.)

Predicted price$

e-3.What price would be predicted by the duration-with-convexity rule?(Do not round intermediate calculations. Round your answer to 2 decimal places.)

Predicted price$

e-4.What is the percent error for each rule?(Do not round intermediate calculations. Round "Duration Rule" to 2 decimal places and "Duration-with-Convexity Rule" to 3 decimal places.)

Percent Error

YTM = 11% Duration Rule: ____%

Duration-with-Convexity Rule: _____%

e-5.Are your conclusions about the accuracy of the two rules consistent with parts (a) (d)?

Yes/No?