Question: Please focus on d) and e)! Thank you! #4. Consider 3 year 6% bond with the par of $100 and semi-annual coupon payments. The YTM

Please focus on d) and e)! Thank you!

#4. Consider 3 year 6% bond with the par of $100 and semi-annual coupon payments. The YTM of the bond is 8%. a) Compute the annual modified duration of this bond. d) What is the convexity measure of this bond? e) Suppose that yields increase from 8% to 9% instantaneously. Using the modified duration and the convexity measure of the bond, approximate the dollar price change. Compare the answer to that of c)

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