Question: Using the following data, estimate the impact on bond prices of an increase in yield (interest rates) by 0.25% pa. for each of the 3

Using the following data, estimate the impact on bond prices of

Using the following data, estimate the impact on bond prices of an increase in yield (interest rates) by 0.25% pa. for each of the 3 bonds. You should estimate both the percentage change in the bond prices and also the new bond prices. You need to take into account both duration and convexity. Company Coupon Payment Duration Yield Convexity Bond Price frequency 12.00% 3.667 5.373 16.552 127.46 GlaxoSmithKline 4.895% _2.702 4.433 8.481 101 010 -_--_4-814 % a ( D; xAy)+ (xCorwexity>

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