Question
A certain bond has a duration of 7.4378 with a yield-to-maturity of 6%. The current bond price is $1,142.94. Convexity for this bond is determined
A certain bond has a duration of 7.4378 with a yield-to-maturity of 6%. The current bond price is $1,142.94. Convexity for this bond is determined to be 98.74. What would be the bond's new price if interest rates suddenly dropped by 2.5%?
| $1,432.10 |
| $987.42 |
| $1,378.01 |
| $907.18 |
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Foundations of Financial Management
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta
10th Canadian edition
1259261018, 1259261015, 978-1259024979
