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What is the price-duration and convexity of the bond

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A three year bond with face value of $1000 pays annual coupons of 4 percent and has a yield- to-maturity of 5 percent. What is the price, duration, and convexity of the bond?

Suppose the yield increases to 6 percent. Use the duration rule to estimate the new price. Use duration and convexity to estimate the new price. Use the bond price equation to compute the exact new price.

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Reference no: EM132288863

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