Question: Hi I need help calculating below and how to create two charts. A bond has a face value of $1,000, an annual coupon rate of
Hi I need help calculating below and how to create two charts.
A bond has a face value of $1,000, an annual coupon rate of 6.50%, an yield to maturity of 9.2%, makes 2 (semi-annual) coupon payments per year, and 10 periods to maturity (or 5 years to maturity). Determine approximately what percent change in bond price will result from a given change in yield to maturity by comparing on a graph the duration approximation versus the actual percent change in the bond price. On the horizontal axis put the YTM and on the vertical axis put two things: price and duration. You should get two charts together, so you will be able to compare them.
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