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Citicorp issues a bond providing a 3% coupon semiannually maturing in three years. The par value...

Citicorp issues a bond providing a 3% coupon semiannually maturing in three years. The par value of the bond is 1,000 and the yield to maturity is 3%. 1) What is the price of this bond? 2) Compute the duration and convexity of the bond. 3) Approximately compute the new price of the bond as the yield increases to 200 basis points only with the duration from 2). 4) Approximately compute the new price of the bond as the yield increases to 200 basis points with both the duration and convexity from 2) and 3).

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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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