Question
A two-year coupon-paying bond has a face value of $100 000, yield of 7.5% p.a. and coupon rate of 7.5% p.a. The interest rates are
A two-year coupon-paying bond has a face value of $100 000, yield of 7.5% p.a. and coupon rate of 7.5% p.a. The interest rates are paid half yearly.
a) Calculate the price of the bond
b) Calculate the duration of a bond
c) Calculate the convexity of the bond.
d) The yield on the bond instantaneously increases from 7.5% to 7.7%.
*Please write down the formula instead of Excel format
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Financial management theory and practice
Authors: Eugene F. Brigham and Michael C. Ehrhardt
13th edition
1439078106, 111197375X, 9781439078105, 9781111973759, 978-1439078099
