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solve in excel A bond with a face value of $1000 and maturity of exactly 20 years pays a 10% annual coupon. This bond is

solve in excel

A bond with a face value of $1000 and maturity of exactly 20 years pays a 10% annual coupon. This bond is currently selling at an annual yield-to-maturity (YTM) of 12%. Answer the following questions for this bond.

  1. Using modified Duration, what is the percentage change in price from the original level (found in part a) when YTM is 11%? (6)
  2. Calculate the convexity of the bond without using any Excel built-in function. (12)
  3. Using the modified duration plus convexity model, what is the new price of the bond when YTM is 13%? (6)
  4. Using the modified duration plus convexity model, what is the percentage price change from the original level (found in part a) of the bond when YTM is 13%. (6)

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