A certain bond has already duration of 3.25 years and convexity of 12.50, the yield rate before
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Question:
A certain bond has already duration of 3.25 years and convexity of 12.50, the yield rate before a change was 3%, the bond pays coupon monthly. After a change of yield rate using the formula with duration and convexity calculated that the price of this bond should increased by 3,30944%. What was the change of yield rate?
a.
It increased by 1.5 percentage points
b.
It decreased by 1.5 percentage points.
c.
It decreased by 1 percentage point.
d.
It increased by 1 percentage points
Related Book For
Fundamental financial accounting concepts
ISBN: 978-0078025365
8th edition
Authors: Thomas P. Edmonds, Frances M. Mcnair, Philip R. Olds, Edward
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