Bond making annual coupon payments

Assignment Help Financial Management

Reference no: EM131899189

Looking for percent error for the duration and duration w/convexity rule. A 30 year bond making annual coupon payments w/coupon rate of 9.50 has a duration of 13.53 years and a convexity of 258.03. The bond currently sells at a yield to maturity of 6%(which is 1428.05) If the bond fell to 5% witch calculates to 1691.72 with a value of 1671.22 w/duration and 1689.92 duration w/convexity. I can not calculate the percentage error for duration rule (duration w/convexity is -.13) No matter what I come up with, it’s wrong. Same for the rise to 7% - price has been calculated to1310.54, duration is 1292.88 and duration w/convexity 1312.00. (Duration w/convexity is .13) all numbers have been verified - don’t need those , just the two percent errors for the duration.

Reference no: EM131899189

Questions Cloud

Discuss the anatomy of the gi tract : Discuss the anatomy of the GI tract (from Introduction to Digestion are on Canvas Modules) in relation to the swallowing experiment.

How will you test your hypothesis : What does business pr economic theory imply for your topic? Look at microeconomics and macroeconomics, or management theories.

How bacterial species are divided into groups : Compare how bacterial species are divided into groups According to their temperature and oxygen requirements

Type of pollution that impacts the carbon cycle : Can you tell me the type of pollution that impacts the carbon cycle

Bond making annual coupon payments : Looking for percent error for the duration and duration w/convexity rule. A 30 year bond making annual coupon payments

Develop hacking drone application from unaithorized access : Develop hacking drone application from unaithorized access - Consent that you accept your thesis to be made available on BREO/LRC

Give an example of a hypothesis and a theory : Why is there controversy about the scientific method and positivism? What is meant by Post-positivism?

Why is the statement of cash flows useful document : Why is the statement of cash flows a useful document?

Disadvantages of having large cash balance : What are the advantages of having a large cash balance? What are the disadvantages of having a large cash balance?

User Account

All Pages