Question: help!!! i need e1-e5 this is the only info it gives me. A 30-year maturity bond making annual coupon payments with a coupon rate of



A 30-year maturity bond making annual coupon payments with a coupon rate of 12.3% has duration of 9.55 years and convexity 133.7. The bond currently sells at a yield to maturity of 11%. Required: a. Find the price of the bond if its yield to maturity falls to 10%. (Do not round intermediate calculations. Round your answer to 2 decimal places.) b. What price would be predicted by the duration rule, if its yield to maturity falls to 10% ? (Do not round intermediate calculations. Round your answer to 2 decimal places.) c. What price would be predicted by the duration with-convexity rule, if its yield to maturity falls to tox? (Do not round intermediate calculations. Pound your answer to 2 decimal places.) c. What price would be predicted by the duration-with-convexity rule, if its yield to maturity falls to 10% ? (Do not round intermediate calculations. Round your answer to 2 decimal places.) d-1. What is the percent error for each rule, if its yieid to maturity falls to 10% ? (Enter your answers as a positive value. Do not round Intermediate calculations. Round "Duration Rule" to 2 decimal places and "Duration-with-Convexity Rule" to 3 decimal places.) d-2. What do you conclude about the accuracy of the two rules? d-2. What do you conclude about the accuracy of the two rules? The duration rule provides more accurate approximations to the actual change in price. The duration-with-convexity rule provides more accurate approximations to the actual change in price. e-1. Find the price of the bond if it's yleid to maturity rises to 12\%. (Do not round intermediate calculations. Round your answer to 2 decimal places.) e-2. What price would be predicted by the duration rule, If it's yield to maturity rises to 12% ? (Do not round intermediate calculations. Round your answer to 2 decimal places.) e-3. What price would be predicted by the duration-with-convexity rule, if it's yieid to maturity rises to 12% ? (Do not round intermediate calculations. Round your answer to 2 decimal places.) e-4. What is the percent error for each rule? (Do not round intermediate calculations. Round "Duration Rule" to 2 decimal places and "Duration-with.Convexity Rule" to 3 decimal places.) e.5. Are your conclusions about the accuracy of the two rules consistent with parts (a)(d)
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
