Question
You have a 25-year maturity, 10% coupon, 10% yield bond with a duration of 10 years and a convexity of 135. If the interest rate
You have a 25-year maturity, 10% coupon, 10% yield bond with a duration of 10 years and a convexity of 135. If the interest rate were to increase 125 basis points, your predicted price change for the bond (including convexity) is
A. -10.23%
B. -10.31%
C. -10.42%
D. -10.5%
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Intermediate Financial Management
Authors: Eugene F. Brigham, Louis C. Gapenski
4th Edition
0030754828, 978-0030754821
