Please use percent of PAR and show work in Financial calculator, not Excel!

(1) (25 pts) A corporate bond has a modified duration of 6.600 and an approximate convexity of 33.750. Assume that changes in its credit rating by the rating agencies causes the bond's yield spread to increase or decrease. Please answer the following questions. (a) What would be the price impact of a 50bps increase in its spread over the benchmark, ignoring convexity? Be sure to indicate if it is a price increase or decrease. (b) What would be the price impact of a 75bps decrease in its spread over the benchmark, ignoring convexity. Be sure to indicate if it is a price increase or decrease. Include the convexity correction. (d) What would be the price impact of a 175bps decrease in spread over the benchmark. Include the convexity correction. (1) (25 pts) A corporate bond has a modified duration of 6.600 and an approximate convexity of 33.750. Assume that changes in its credit rating by the rating agencies causes the bond's yield spread to increase or decrease. Please answer the following questions. (a) What would be the price impact of a 50bps increase in its spread over the benchmark, ignoring convexity? Be sure to indicate if it is a price increase or decrease. (b) What would be the price impact of a 75bps decrease in its spread over the benchmark, ignoring convexity. Be sure to indicate if it is a price increase or decrease. Include the convexity correction. (d) What would be the price impact of a 175bps decrease in spread over the benchmark. Include the convexity correction