Question
The professor purchases a 12 year bond at a purchase price of $1950 which has a par value of $2500 at a coupon rate of
The professor purchases a 12 year bond at a purchase price of $1950 which has a par value of $2500 at a coupon rate of 6.75% p.a. The yield rate is flat at 12%p.a. By referring to the approximate convexity of the bond and the modified duration of the bond what is the change in the bond price if yield rate increase by 3%.
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Forecasting Methods And Applications
Authors: Spyros G. Makridakis, Steven C. Wheelwright, Rob J Hyndman
3rd Edition
0471532339, 9780471532330
