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A 30-year maturity bond making annual coupon payments with a coupon rate of 65% has duration of 11.73 years and convexity of 199.12. The bond
A 30-year maturity bond making annual coupon payments with a coupon rate of 65% has duration of 11.73 years and convexity of 199.12. The bond currently sells at a yield to maturity of 9%. a. Find the price of the bond if its yield to maturity falls to 8%. (Do not round intermediate calculations. Round your answers to 2 declmal places.) Price of the bond b. What price would be predicted by the duration rule? (Do not round Intermediate calculetions. Round your answers to 2 decimal places.) Predicted new price (duration rule) c. what price would be predicted by the duration-with-convexity rule? (Do not round Intermediate calculations. Round your answers to 2 declmal places.) Predicted new price (duration-with-convexity rule) d-1. What is the percent error for each rule? (Negetlve answers should be Indicated by a minus sign. Do not round Intermediate calculations. Round your answers to 2 declmal places.) Duration-with- Duration Rule Convexity Rule Percentage error
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