s a yield to maturity of 4.29%. This bond makes Dayments per year and thus has 8 periods until sensitivity of a bond to changes in yield and how Huration approximation, and compare to the duran imation?

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
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A3) use Microsoft excel
A 4 year Treasury Bond with a face value of $1,000 and an annual coupon
rate of 5.80% has a yield to maturity of 4.29%. This bond makes
(semi-
annual) coupon payments per year and thus has 8 periods until maturity.
What is the price sensitivity of a bond to changes in yield and how does that
compare to the duration approximation, and compare to the duration plus
convexity approximation?
Y
Transcribed Image Text:A 4 year Treasury Bond with a face value of $1,000 and an annual coupon rate of 5.80% has a yield to maturity of 4.29%. This bond makes (semi- annual) coupon payments per year and thus has 8 periods until maturity. What is the price sensitivity of a bond to changes in yield and how does that compare to the duration approximation, and compare to the duration plus convexity approximation? Y
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