A B 11.0% 12% Coupon Yield to maturity Maturity (years) 11.0% 11.50% 5 7 Par $100.00 $100.00 Price $100.00 $102.36 2. Choose one of the bonds in question 2 (A or B), answer the following questions: a) What is the percent price change in the bond if YTM rises 100 bps? b) If you approximate the price change by only using the duration of the bond, what is the difference between the duration approach and actual price change? c) If you use both the duration and the convexity of the bond, does error term gets lower? A B 11.0% 12% Coupon Yield to maturity Maturity (years) 11.0% 11.50% 5 7 Par $100.00 $100.00 Price $100.00 $102.36 2. Choose one of the bonds in question 2 (A or B), answer the following questions: a) What is the percent price change in the bond if YTM rises 100 bps? b) If you approximate the price change by only using the duration of the bond, what is the difference between the duration approach and actual price change? c) If you use both the duration and the convexity of the bond, does error term gets lower