Question
Consider a 14 percent, $1,000 par bond maturing in two and a half years if the yield to maturity is 8 percent and interest is
Consider a 14 percent, $1,000 par bond maturing in two and a half years if the yield to maturity is 8 percent and interest is paid semiannually.
7.7 Calculate the convexity of the bond.
7.8 If the price before yields changed was $1,133.55, what is the resulting price taking into account both the effect of duration and convexity if yields decrease by 20 basis points?
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Management Foundations A Pacific Rim Focus
Authors: Kathryn Bartol, Margaret Tein, Graham Matthews, Bishnu Sharma, Brenda Scott Ladd
3rd Edition
978-0070284944, 0070284946
