Suppose that you own a Canadian government bond. It has a coupon rate of 5% and 12 years to maturity. The yield is 3%. If you expect the yield to go up by 75 basis points (1 percent = 100 basis points) tomorrow, by how much do you expect the bond will increase or decrease in price?  

Answer rating: 100% (QA)

To calculate the expected change in price of the bond we need to consider the relationship between b... View the full answer