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
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ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
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Chapter1: Investments: Background And Issues
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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 %.
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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