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A bond of the Kanon corporation has the following charactaristic : Maturity 11 years Coupon 10 percent yield to maturity 10.5 percent Macauly duration 5.5
A bond of the Kanon corporation has the following charactaristic :
Maturity 11 years
Coupon 10 percent
yield to maturity 10.5 percent
Macauly duration 5.5 yeasr
convexity 49
noncallable
1. calculate the approximate price change for this bond using only its durration , assuming its yiled to maturity increased bu 150 basis point discuss without calculation the impact when you include the convexity effect
2. Calculate the approximate price change this bond using only duration , if its yield to maturity declined by 300 basis pounts.
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