Purchasing power as a result of owning a bond

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Reference no: EM131508788

1. Estimate using duration, with a convexity of 40, what is the approximate change in the price of a bond that is: 7% 30 year bond paying a market rate of 7% if the yield alters by 2%?

2. Which one of the following rates represent the change if any in your purchasing power as a result of owning a bond?

Reference no: EM131508788

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