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N/A Your feed income broker has suggested a bond to be added to your existing bond portfolio 365% coupon 27-yhnal with annual pay trading at
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Your feed income broker has suggested a bond to be added to your existing bond portfolio 365% coupon 27-yhnal with annual pay trading at 5% All bonds that are recommended for purchase are subject to sensitivity analysis. To determine the potential change in price of a 200 bps increase in rates, you are provided the following information: . Modified duration - 13.9136 Convexity - 285 48 A The current price of the bond is Select Bol rates increase by 200 bps, the new price of the bond will be select 1 reflecting a percentage change of Stect C.The DURATION ONLY APPROACH would anticipate A PRICE CHANGE OF Select The DURATION - CONVEXITY APPROACH would anticipate A PRICE CHANGE OF 1 Select) E The Select approach provides a better indication of the expected change in price of Select in rates Step by Step Solution
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