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Lydia just purchased a Treasury bond for $114.201 at a yield rate of j2=6.09% p.a. The duration of Lydia's bond is 9.8247 years. Using the
Lydia just purchased a Treasury bond for $114.201 at a yield rate of j2=6.09% p.a. The duration of Lydia's bond is 9.8247 years. Using the bond price sensitivity formula, calculate the change in price of Lydia's bond that would result from an increase in the yield rate (j2) of 49 basis points. Round your answer to four decimal places. (The values below are all in dollars.) a. -2.5911 b. -5.3353 c. -2.6676 d. -5.1822
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