Consider a semi-annual 5-year bond to maturity, pay a coupon of 5% and be marketed at a reasonable price with a return of 6%.

Calculate the following

a. Percentage change in price as a result of a 1% increase in yield to maturity (ytm)

b. Percentage change in price due to a decrease of 1% in yield to maturity (ytm)

c. Redo part a and b; above; given that the bond has a convexity of 5

d. What can you conclude from the above calculations?