Question: A bond with a face value $1000 and maturity 4 years has an annual coupon rate of 10% (paid annually). Interest rates are 10% per

A bond with a face value $1000 and maturity 4 years has an annual coupon rate of 10% (paid annually). Interest rates are 10% per annum for every maturity.

Use the convexity formula to estimate the percentage change in price from a 2% increase in yields.

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