a) The modified duration for a 6 coupon bond is 10 years Its interest is paid semiannually The bond currently sells for $800 with a YTM of 8 By using the duration only, if the YTM increases to 9 , what is the predicted change in price A $78 95 B $76 93 C $80 00 D $77 68 B) You want to buy a bond issued by iCare Corp The iCare bond has a par value of $1 million and a coupon rate of 10 The coupons are paid annually, and the bond matures in 3 years The cost of debt for the bond is 8 What is the convexity of the bond A 9 1137 B 8 7431 C 10 2159 D 7 0202

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Question: a) The modified duration for a 6% coupon bond is 10 years. Its interest is paid semiannually. The bond currently sells for $800 with a

The modified duration for a 6% coupon bond is 10 years. Its interest is paid semiannually. The bond currently sells for $800 with a YTM of 8%. By using the duration only, if the YTM increases to 9%, what is the predicted change in price?

	A.	$78.95
	B.	$76.93
	C.	$80.00
	D.	$77.68

You want to buy a bond issued by iCare Corp. The iCare bond has a par value of $1 million and a coupon rate of 10%. The coupons are paid annually, and the bond matures in 3 years. The cost of debt for the bond is 8%. What is the convexity of the bond?

	A.	9.1137
	B.	8.7431
	C.	10.2159
	D.	7.0202

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