Question: Par value $100.00 Coupon rate 4% Frequency 2 per year Yield-to-maturity 6% Term to maturity 3 years If the yield increases by 1%, how will

Par value

$100.00

Coupon rate

4%

Frequency

2 per year

Yield-to-maturity

6%

Term to maturity

3 years

If the yield increases by 1%, how will the duration and convexity impact the bond price?

The price will increase by $5.44.

The price will decrease by $4.75.

The price will increase by $3.42.

The price will decrease by $2.58.

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