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There is a par 30 year, 6% bond. What is the % alteration, if the ytm...

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Finance

There is a par 30 year, 6% bond. What is the %alteration, if the ytm alters by 2%? Do it with duration alone.Then, find the change, if you include convexity also. The convexityis 40.

Please show formula and show all work.

Answer & Explanation Solved by verified expert
3.7 Ratings (601 Votes)
DurationPeriodCash FlowDiscounting factorPV Cash FlowDuration Calc01000001YTMumber of coupon payments in the yearperiodcashflowdiscounting    See Answer
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There is a par 30 year, 6% bond. What is the %alteration, if the ytm alters by 2%? Do it with duration alone.Then, find the change, if you include convexity also. The convexityis 40.Please show formula and show all work.

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