question archive 3, 4) Calculate the modified duration of a three-year par bond with a coupon rate of 9% (paid annually)
3, 4) Calculate the modified duration of a three-year par bond with a coupon rate of 9% (paid annually)
Subject:FinancePrice: Bought3
3, 4) Calculate the modified duration of a three-year par bond with a coupon rate of 9% (paid annually). Par value is R1 000. Round PV to TWO decimal places and all weights to FOUR decimal places.
3, 5) Consider a bond selling at par with modified duration of 22 years and convexity of 415. A2% decrease in yield would cause the price to increase by 44%, according to the duration rule. That would be the percentage price change according to the duration-with-convexity rule? Interpret the percentage change.
