GM has issued bonds that currently have a yield - to - maturity of 4%. These bonds have a modified duration of 6.15 and a convexity measure of 46. Approximate the percentage change in the price of these bonds if the yield - to - maturity increases to 4.75 % . Please write your answer using at least 3 decimal places. Using the information from the previous problem and assuming that the current price of the GM bond is $1,085, calculate th
GM has issued bonds that currently have a yield - to - maturity of 4%. These bonds have a modified duration of 6.15 and a convexity measure of 46. Approximate the percentage change in the price of these bonds if the yield - to - maturity increases to 4.75 % . Please write your answer using at least 3 decimal places. Using the information from the previous problem and assuming that the current price of the GM bond is $1,085, calculate th
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
Problem 1PS
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![GM has issued bonds that currently have a yield - to - maturity of 4%.
These bonds have a modified duration of 6.15 and a convexity measure of
46. Approximate the percentage change in the price of these bonds if the
yield - to - maturity increases to 4.75 % . Please write your answer using at
least 3 decimal places. Using the information from the previous problem
and assuming that the current price of the GM bond is $1,085, calculate the
new price if the yield - to - maturity increases to 4.75 %.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fc5e95ccb-20b0-47bf-809e-22f2d8888bee%2F167bbd24-abab-4ef1-bc04-9080dd6e0deb%2Fab6zgqq_processed.jpeg&w=3840&q=75)
Transcribed Image Text:GM has issued bonds that currently have a yield - to - maturity of 4%.
These bonds have a modified duration of 6.15 and a convexity measure of
46. Approximate the percentage change in the price of these bonds if the
yield - to - maturity increases to 4.75 % . Please write your answer using at
least 3 decimal places. Using the information from the previous problem
and assuming that the current price of the GM bond is $1,085, calculate the
new price if the yield - to - maturity increases to 4.75 %.
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