Question
For a change in yield to maturity, explain in your own words why the approximate bond price calculated using duration is always less than the
For a change in yield to maturity, explain in your own words why the approximate bond price calculated using duration is always less than the fully recalculated bond price using the new yield to maturity. Use a diagram with yield to maturity on the horizontal axis and bond price on the vertical axis to help explain your point.
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International Finance Theory and Policy
Authors: Paul R. Krugman, Maurice Obstfeld, Marc J. Melitz
10th edition
978-0133425895, 133425894, 978-0133423631, 133423638, 978-0133423648
