You have a 20-year maturity, 7% coupon, 8% yield bond with duration of 10.88 years and convexity of 152.49. The bond is currently priced at $901.82. If the interest rate were to i by 1 percent, your predicted new price for the bond (including convexity) is $811 $818 O $826 O $822 O $814

You have a 20-year maturity, 7% coupon, 8% yield bond with duration of 10.88 years and convexity of 152.49. The bond is currently priced at $901.82. If the interest rate were to i by 1 percent, your predicted new price for the bond (including convexity) is $811 $818 O $826 O $822 O $814

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter4: Bond Valuation

Section: Chapter Questions

Problem 8MC: Suppose a 10-year, 10% semiannual coupon bond with a par value of 1,000 is currently selling for...

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Question

am. 111.

You have a 20-year maturity, 7% coupon, 8% yield bond with duration of 10.88 years and a
convexity of 152.49. The bond is currently priced at $901.82. If the interest rate were to increase
by 1 percent, your predicted new price for the bond (including convexity) is
$811
O $818
$826
$822
$814

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