Given a bond with a 15-year maturity, 4% coupon rate, and sells at an initial value...

Given a bond with a 15-year maturity, 4% coupon rate, and sells at an initial value of 4%, create an excel table to calculate this bond’s duration, modified duration and convexity.

a. If the bond’s yield increases from 4% to 5%, find the percentage decrease of the bond using the approximation formula

b. If the bond’s yield increases from 4% to 5%, find the percentage decrease of the bond using the duration with convexity formula

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jeff jeffy answered 2 years ago

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