A 30-year maturity bond making annual coupon payments with a coupon rate of 9.2% has duration...

A 30-year maturity bond making annual coupon payments with a coupon rate of 9.2% has duration of 10.46 years and convexity of 160.31. The bond currently sells at a yield to maturity of 10%.

e-1. Find the price of the bond if its yield to maturity increases to 11%. (Do not round intermediate calculations. Round your answers to 2 decimal places.)

e-2. What price would be predicted by the duration rule? (Do not round intermediate calculations. Round your answers to 2 decimal places.)

e-3. What price would be predicted by the duration-with-convexity rule? (Do not round intermediate calculations. Round your answers to 2 decimal places.)

e-4. What is the percent error for each rule? (Negative answers should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to 2 decimal places.)

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SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

jeff jeffy answered 1 year ago

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