Question
C If interest rates were to decrease by 25 basis points, (i) what percentage change in price would you expect for the bond? (ii)
C If interest rates were to decrease by 25 basis points, (i) what percentage change in price would you expect for the bond? (ii) Find the new price using the duration method. (5 points) If the change in interest rates were 10 basis points, would the pricing error using the duration method be greater/less than the direct method of pricing? Briefly explain
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Fundamentals of Investing
Authors: Scott B. Smart, Lawrence J. Gitman, Michael D. Joehnk
12th edition
978-0133075403, 133075354, 9780133423938, 133075400, 013342393X, 978-0133075359
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