You have a semi-annual bond with 25 years to maturity with a 10% c rate and par value of 1000£. The current YTM of the bond is 10%, the m duration is 9.12 and the convexity is 141.03. I. II. What is the percentage price change if interest rate were to f basis points considering both duration and convexity? What is the estimated price with 125 basis points decrease in

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Bond Valuation

Bond valuation are the notes issued by the corporation to raise long-term funds for the business. The corporations are required to pay the interest on such liabilities at a specified rate of interest (termed as coupon rate) at specified dates which may be on semi-annual or annual basis. These interest payments may be in the form of coupons.