Business, 21.02.2020 23:52 needhelp9627

A 30-year maturity bond making annual coupon payments with a coupon rate of 8.5% has duration of 12.88 years and convexity of 235.95. The bond currently sells at a yield to maturity of 7%. a. Find the price of the bond if its yield to maturity falls to 6%. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Price of the bond b. What price would be predicted by the duration rule? (Do not round intermediate calculations. Round your answers to 2 decimal places.) Predicted new price (duration rule) c. What price would be predicted by the duration-with-convexity rule? (Do not round intermediate calculations. Round your answers to 2 decimal places.)

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A 30-year maturity bond making annual coupon payments with a coupon rate of 8.5% has duration of 12....