s a yield to maturity of 4.29%. This bond makes Dayments per year and thus has 8 periods until sensitivity of a bond to changes in yield and how Huration approximation, and compare to the duran imation?

Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter4: Bond Valuation
Section: Chapter Questions
Problem 8MC: Suppose a 10-year, 10% semiannual coupon bond with a par value of 1,000 is currently selling for...
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A3) use Microsoft excel
A 4 year Treasury Bond with a face value of $1,000 and an annual coupon
rate of 5.80% has a yield to maturity of 4.29%. This bond makes
(semi-
annual) coupon payments per year and thus has 8 periods until maturity.
What is the price sensitivity of a bond to changes in yield and how does that
compare to the duration approximation, and compare to the duration plus
convexity approximation?
Y
Transcribed Image Text:A 4 year Treasury Bond with a face value of $1,000 and an annual coupon rate of 5.80% has a yield to maturity of 4.29%. This bond makes (semi- annual) coupon payments per year and thus has 8 periods until maturity. What is the price sensitivity of a bond to changes in yield and how does that compare to the duration approximation, and compare to the duration plus convexity approximation? Y
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