Percent price change in bond due to both duration-convexity

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Reference no: EM132054514

Suppose a bond has 20 years left to maturity, an 8% coupon rate, pays interest semiannually, and has a 6% yield to maturity. This bond has a Macaulay duration of 11.23 years and a convexity of 170.26. If its yield to maturity increases 1%, please estimate the percent price change in the bond due to both duration and convexity Please show your work.

Reference no: EM132054514

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