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As a financial analyst at Citibank Investments, you are examining the impact of the yield change on the bond price. A bond has a duration
As a financial analyst at Citibank Investments, you are examining the impact of the yield change on the bond price. A bond has a duration of 9 years, a yield of 9%, a convexity of 150, and a market price of $1,050. Suppose the market yield increases by 50 basis points. Please choose all correct answers. Please note that each incorrect answer will reduce the score by 10%. The percentage change in the bond's price by the duration with convexity formula is -5.2% a. The bond price after the yield change predicted by the duration with convexity formula is $1008.62 b. The percentage change in the bond's price by the duration with convexity formula is 4.3% C. d. The bond price after the yield change by the duration only formula is $1,235.65 The percentage change in the bond's price by the duration only formula is 4.13% e. The bond price after the yield change by the duration only formula is $1006.65 f. U The bond price after the yield change by the duration only formula is $1,100 8. h. The percentage change in the bond's price by the duration only formula is -4.13% i. The percentage change in the bond's price by the duration with convexity formula is -3.94% The bond price after the yield change predicted by the duration with convexity formula is $1026.62 Ok. The bond price after the yield change predicted by the duration with convexity formula is $1048.62 The percentage change in the bond's price by the duration only formula is 4.35%
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