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A 30-year maturity bond making annual coupon payments with a coupon rate of 9.5% has duration of 13.53 years and convexity of 258.03. The bond

A 30-year maturity bond making annual coupon payments with a coupon rate of 9.5% has duration of 13.53 years and convexity of 258.03. The bond currently sells at a yield to maturity of 6%.

a.

Find the price of the bond if its yield to maturity falls to 5% or rises to 7%. (Round your answers to 2 decimal places. Omit the "$" sign in your response.)

Yield to maturity of 5% $
Yield to maturity of 7% $

b.

What prices for the bond at these new yields would be predicted by the duration rule and the duration-with-convexity rule? (Round your answers to 2 decimal places. Omit the "$" sign in your response.)

Duration Rule Duration-with- convexity Rule
YTM falls to 5% $ $
YTM increases to 7% $ $

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