Question: Consider a bond that has 3 years until maturity. The bond pays a coupon of 3% quarterly, has a face value of $10,000, and the

Consider a bond that has 3 years until maturity. The bond pays a coupon of 3% quarterly, has a face value of $10,000, and the yield to maturity for similar bonds is 5%.

What are the duration, modified duration, and convexity of this bond?

If the yield to maturity were to shift downward by 0.25%, what do duration by itself and both duration and convexity predict the price change will be?

What is the step by step calculations needed to acquire the given answer?

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