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A five-year $1000 face value bond has a 5% coupon rate and a 10% yield to...

  1. A five-year $1000 face value bond has a 5% coupon rate and a 10% yield to maturity. It makes annual coupon payments selling for $810.46. Please calculate this bond’s (20 points)

  1. Macaulay duration
  2. Modified duration
  3. Convexity
  4. If the interest rate rises by 100 bps, what would be the dollar amount change in price?

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Expert Solution

ANSWER IN THE IMAGE ((YELLOW HIGHLIGHTED). FEEL FREE TO ASK ANY DOUBTS. THUMBS UP PLEASE.

jeff jeffy answered 1 year ago
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