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Consider a 6%, 25-year bond selling to yield 9%. Its modified duration is 10.62 and convexity is 182.92. If the yield changes of 12%, calculate the percentage change in price based on a combination of both duration and convexity? O a.-23.629% O b.-17.582% Oc-31.86% O d.-20.66%

Consider a 6%, 25-year bond selling to yield 9%. Its modified duration is 10.62 and convexity is 182.92. If the yield changes of 12%, calculate the percentage change in price based on a combination of both duration and convexity? O a.-23.629% O b.-17.582% Oc-31.86% O d.-20.66%

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Consider a 6%, 25-year bond selling to yield 9%. Its modified duration is 10.62 and convexity is 182.92. If the yield changes of 12%, calculate the percentage change in price based on a combination of both duration and convexity? O a.-23.629% O b.-17.582% Oc-31.86% Od.-20.66%
Transcribed Image Text:Consider a 6%, 25-year bond selling to yield 9%. Its modified duration is 10.62 and convexity is 182.92. If the yield changes of 12%, calculate the percentage change in price based on a combination of both duration and convexity? O a.-23.629% O b.-17.582% Oc-31.86% Od.-20.66%
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