Question: Please solve by hand writing, NOT excel Question 14.21 A 20-year bond with a par value of 1,000 pays annual coupons at a rate of

Please solve by hand writing, NOT excel Question 14.21 A 20-year

Please solve by hand writing, NOT excel

Question 14.21 A 20-year bond with a par value of 1,000 pays annual coupons at a rate of 5%. You are given: - The price of the bond is 885.30. - The modified duration of the bond is 11.904. - The modified convexity of the bond is 197.238. The annual effective yield of the bond is 6%. An analyst uses the modified duration and the modified convexity to estimate the percentage change in the price of the bond if the yield decreases to 5%. The resulting estimate for the new price is X. If the yield decreases to 5%, the actual new price will be Y. Calculate XY. A 9.31 B 0.58 C 0.00 D 0.58 E 9.31

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