A bond paying annual coupon of 5% has a duration is 3 years and 5 months....

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A bond paying annual coupon of 5% has a duration is 3 years and 5 months. The bond yield is 3%. Due to turbulence in bond markets the yield increases by 0.1%. By how much does the bond price change? Enter your answer in basis points, so if the price changes by 0.001% enter 10 (for 10 bps). A bond paying annual coupon of 5% has a duration is 3 years and 5 months. The bond yield is 3%. Due to turbulence in bond markets the yield increases by 0.1%. By how much does the bond price change? Enter your answer in basis points, so if the price changes by 0.001% enter 10 (for 10 bps).

Answer rating: 100% (QA)

Answer To calculate the change in bond price due to the increase in yield we can use the concept ... View the full answer