medium · Principles of Finance valuation
A 10-year, 5% annual coupon bond is currently trading at a yield to maturity (YTM) of 6%.
If the modified duration of the bond is 7.5 and the convexity is 68, what is the estimated percentage price change if market yields increase by 100 basis points?
- -7.84%
- +7.16%
- -7.50%
- -7.16%
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