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e) Using only duration, estimate the price of the bond for a 150-basis-point decrease in the yield. f) Using both duration and convexity, estimate the

e) Using only duration, estimate the price of the bond for a 150-basis-point decrease in the yield.

f) Using both duration and convexity, estimate the price of the bond for a 150-basis-point decrease in the yield.

g) Why the estimate of your result in part f is closer to the actual price than that in part e)?

Coupon rate (CR) Yield to maturity (YTM) Maturity (years) Par value (F) Price 7% 676 12 $1,000 $1,084.68

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