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??? Consider a bond that pays $50 semi-annual interest and has a remaining life of 10 years....

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Finance

???

  1. Consider a bond that pays $50 semi-annual interest and has aremaining life of 10 years. The bond currently sells for $987 andhas a yield to maturity of 10.20%.
    1. What is the bond’s duration?
  1. What is its modified duration?
  1. What is its convexity?
  1. What percentage change in bond price would be expected for onepercent decrease in interest rate?

Answer & Explanation Solved by verified expert
3.6 Ratings (312 Votes)
aPeriodCash FlowDiscounting factorPV Cash FlowDuration Calc0987001YTMumber of coupon payments in the yearperiodcashflowdiscounting    See Answer
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???Consider a bond that pays $50 semi-annual interest and has aremaining life of 10 years. The bond currently sells for $987 andhas a yield to maturity of 10.20%.What is the bond’s duration?What is its modified duration?What is its convexity?What percentage change in bond price would be expected for onepercent decrease in interest rate?

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