Question
A bond has 30 years until maturity, an 8% annual coupon, and YTM of 8%. The modified duration is 18.70 years and convexity is 225.59.
A bond has 30 years until maturity, an 8% annual coupon, and YTM of 8%. The modified duration is 18.70 years and convexity is 225.59. Yields are expected to increase to 14%. What is the estimated percentage price change using the duration with convexity rule? Please show all work
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Financial Markets And Institutions
Authors: Jeff Madura
6th Edition
0324162618, 978-0324162615
