I need help with questions #23

23. Find the convexity of a seven-year maturity, 6% coupon bond selling at a yield to matu- rity of 8%. The bond pays its coupons annually (Hint: You can use the spreadsheet from this chapter's Excel Application on Convexity, setting cash flows after year 7 equal to zero. The spreadsheet is available at www.mhhe.com/bkm; link to Chapter 11 material) (LO 11-3) 24. a. Use a spreadsheet to calculate the durations of the two bonds in Spreadsheet 11.1 if the interest rate increases to 129%. Why does the duration of the coupon bond fall while that of the zero remains unchanged? (Hint: Examine what happens to the weights computed in column E.) b. Use the same spreadsheet to calculate the duration of the coupon bond if the coupon were 1296 instead of 896 Explain why the duration is lower. (Again, start by looking at column E.) (LO 11-2) 23. Find the convexity of a seven-year maturity, 6% coupon bond selling at a yield to matu- rity of 8%. The bond pays its coupons annually (Hint: You can use the spreadsheet from this chapter's Excel Application on Convexity, setting cash flows after year 7 equal to zero. The spreadsheet is available at www.mhhe.com/bkm; link to Chapter 11 material) (LO 11-3) 24. a. Use a spreadsheet to calculate the durations of the two bonds in Spreadsheet 11.1 if the interest rate increases to 129%. Why does the duration of the coupon bond fall while that of the zero remains unchanged? (Hint: Examine what happens to the weights computed in column E.) b. Use the same spreadsheet to calculate the duration of the coupon bond if the coupon were 1296 instead of 896 Explain why the duration is lower. (Again, start by looking at column E.) (LO 11-2)