You are given a bond with a yield to maturity of 16%, Macaulay duration of 12 and a convexity of 52. Given this information, give a more accurate estimate of the percentage price change if yields increase by 2%. (Choose the closest answer) O A. The price is estimated to decrease by 22.96% O B. The price is estimated to decrease by 20.69% O C. The price is estimated to decrease by 19.65% O D. The price is estimated to decrease by 24%
You are given a bond with a yield to maturity of 16%, Macaulay duration of 12 and a convexity of 52. Given this information, give a more accurate estimate of the percentage price change if yields increase by 2%. (Choose the closest answer) O A. The price is estimated to decrease by 22.96% O B. The price is estimated to decrease by 20.69% O C. The price is estimated to decrease by 19.65% O D. The price is estimated to decrease by 24%
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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Transcribed Image Text:You are given a bond with a yield to maturity of 16%, Macaulay duration of 12 and a convexity of 52. Given this information, give a more accurate estimate of the percentage price change if yields increase by 2%. (Choose the
closest answer)
O A. The price is estimated to decrease by 22.96%
O B. The price is estimated to decrease by 20.69%
O C. The price is estimated to decrease by 19.65%
O D. The price is estimated to decrease by 24%
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