A newly issued bond has a maturity of $10$ years and pays a $7\mathrm{.}2\%$ coupon rate $($with coupon payments coming once annually$).$ The bond sells at par value.

Required:

a$.$ What are the convexity and the duration of the bond?

b$.$ Find the actual price of the bond assuming that its yield to maturity immediately increases from $7\mathrm{.}2\%$ to $8\mathrm{.}2\%($with maturity still $10$ years$).$ Assume a par value of $100.$

c$.$ What price would be predicted by the modified duration rule $\%$ media $22$ formula $103.mml\%$ What is the percentage error of that rule?

d$.$ What price would be predicted by the modified duration$-$with$-$convexity rule $\%$media:$22$formula $105.mml\%$ What is the percentage error of that rule?

Complete this question by entering your answers in the tabs below.

Required A

Required B

Required C

Required D

What are the convexity and the duration of the bond? Use the formula for convexity in footnote $7.$

Note: Round "Convexity" to $3$ decimal places and "Duration" to $2$ decimal places.

$\backslash$table$[[$Convexity$,45000],[$Duration$,7\mathrm{.}46]]$