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Consider a 3-year bond with face value $1000 and annual coupon rate 4%. The coupon is paid semi-annually. a) Suppose the yield-to-maturity is 3%, derive

image text in transcribed Consider a 3-year bond with face value $1000 and annual coupon rate 4%. The coupon is paid semi-annually. a) Suppose the yield-to-maturity is 3%, derive the current bond price, and its duration and convexity. b) Suppose the yield-to-maturity increases from 3% to 3.1%, derive the corresponding bond price

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