A nine-year maturity, AAA-rated corporate bond has a 6 percent coupon rate. The bond's promised yield is currently 5.75 percent and the bond sells for its fair present value. The bond pays interest semiannually and has an annual duration of 7.1023 years. 1. what is the bonds convexity 2. if promised yields decrease to 5.45 percent, what is the bonds predicted new price, including convexity

A nine-year maturity, AAA-rated corporate bond has a 6 percent coupon rate. The bond's promised yield is currently 5.75 percent and the bond sells for its fair present value. The bond pays interest semiannually and has an annual duration of 7.1023 years. 1. what is the bonds convexity 2. if promised yields decrease to 5.45 percent, what is the bonds predicted new price, including convexity

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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