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Assume that the yield curve is flat at 5.7%. The bond has 3 years to maturity, and pays coupons annually. The face value of the

Assume that the yield curve is flat at 5.7%. The bond has 3 years to maturity, and pays coupons annually. The face value of the bond is $100, and the bond pays a 4.62% coupon rate. ______________________________________________________________________ (a) Compute the price of the bond. unanswered ______________________________________________________________________ (b) Compute the modified duration of the bond. unanswered ______________________________________________________________________ (c) Compute the convexity of the bond by applying the formula: CX=121Bd2Bdy2, where B is the bond price and y is the bond yield. unanswered ______________________________________________________________________ (d) Suppose there is a parallel shift in all interest rates by +2.55%. Compute the value of the bond price following the change in interest rates by applying the duration-based first-order approximation. unanswered ______________________________________________________________________ (e) Suppose there is a parallel interest rate shift in all interest rates by +2.55%. Compute the value of the bond price following the change in interest rates by applying the second-order approximation with both duration and convexity terms. unanswered ______________________________________________________________________ (f) Suppose there is a parallel shift in all interest rates by +2.55%. Compute the exact value of the bond price following the change in interest rates.

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