E F B D 78 79 Question 5 10 points 80 A 30-year maturity bond making annual coupon payments with a coupon rate of 15.50% has a duration of 11.25 years 81 and convexity of 182.90. The bond currently sells at a yield to maturity of 8.00% 82 83 a. Find the exact dollar price of the bond if its yield to maturity falls to 7.00% 84 85 Bond price (rounded to nearest cent) 86 87 b. Assume that you need to make a quick approximation using the duration rule (instead of the exact calculation in part above) 88 What is the new price as approximated by the duration rule when the yield to maturity falls to 7.00%? 89 90 Estimated bond price (rounded to nearest cent) 91 92 c Assume that you need to make a quick approximation using the duration-with-convexity rule instead of the exact calculation in parta) 93 #N/A 94 95 Estimated bond price (rounded to nearest cent) 96 97 d. Which approximation method is more accurate? (answer check is not provided for this question) 98 99 10 points