A 30-year bond making annual payments has a coupon rate of 12%, a duration of 11.54years, and convexity of 192.4. The bond is currently selling at a yield to maturity of 8%. Use the duration-with -convexity approximation to predict the new price of the bond if the yield to maturity declines from 8% to 7%. Assume a face value of 1000.

Answer rating: 100% (QA)

Given about a bond Face value 1000 Coupon rate 12 paid annu... View the full answer