Q4

Question 4: (3 points) 3 and show the formulas in the orange cells. 6 Yield to maturity 7Coupon 9 Frequency 100 \begin{tabular}{|l|l|l|l|} \hline Bond Price & & & Formula \\ \hline Convexity & & & \\ \hline & & Formula \\ \hline \end{tabular} 11 Modified Duration Use Excel's Data Table to run a sensitivity analysis of the duration as a function of the coupon rate (coupon rate=0\%,1\%,2\%,3\%,4\%,5\%,6\%,7\%,9\%,13\%,15\%,17\%)and comment on the effect of coupon on the duration. What is the interpretation of the modified duration? Build a chart of the duration as a function of the coupon rate. What is the interpretation of the convexity