An 8% annual coupon bond has three years until maturity.

A.What is the duration of the bond if the yield to maturity is 8%?

B.A 30-year maturity bond making annual coupon payments with a coupon rate of 12% has duration of 11.54 years and convexity of 192.4.The bond currently sells at a yield to maturity of 8%.

Find the price of the bond at 8% YTM and also if its YTM falls to 7%.

What price would be predicted by the duration method if the YTM falls to 7%?

Would the price predicted by the duration-with-convexity method, if YTM falls to 7%, be more accurate or less accurate than just the duration method?