Question
You have a 20-year maturity and a 10% yield bond. This bond has a duration of 10 years (thus a modified duration =9.09), and a
You have a 20-year maturity and a 10% yield bond.
This bond has a duration of 10 years (thus a modified duration =9.09), and a convexity of 140.
If the interest rate were to increases 50 basis points (+0.5%), your predicted the percentage price change (P/P) of the bond is going to ______________(increase or decrease) at _____________ %
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Principles Of Managerial Finance
Authors: Lawrence J. Gitman, Chad J. Zutter
13th Edition
9780132738729, 136119468, 132738724, 978-0136119463
