Assume that the continuously compounded interest rate is 6%. A bond has 8% coupon paid annually, 3 years to maturity and par value of $100. Suppose the interest rate goes down to 5%. What would be the...

Assume that the continuously compounded<br>interest rate is 6%. A bond has 8% coupon<br>paid annually, 3 years to maturity and par<br>value of $100. Suppose the interest rate goes<br>down to 5%. What would be the percentage<br>change in the bond price implied by the<br>duration plus convexity approximation?<br>

Extracted text: Assume that the continuously compounded interest rate is 6%. A bond has 8% coupon paid annually, 3 years to maturity and par value of $100. Suppose the interest rate goes down to 5%. What would be the percentage change in the bond price implied by the duration plus convexity approximation?

Jun 05, 2022

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Assume that the continuously compounded interest rate is 6%. A bond has 8% coupon paid annually, 3 years to maturity and par value of $100. Suppose the interest rate goes down to 5%. What would be the...

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