Business, 17.08.2021 16:30 AnActualTrashcan

Consider a bond selling at par with modified duration of 10.6 years and convexity of 210. A 2% decrease in yield would cause the price to increase by 21.2% according to the duration approximation. What would be the percentage price change if we use both Duration and Convexity to approximate price response to a yield change? A. the bond price would increase more than 21.2% B. the bond price would increase less than 21.2% C. the bond price would increase just 21.2% D. the bond price would decrease more than 21.2% E. the bond price would decrease less than 21.2%

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Consider a bond selling at par with modified duration of 10.6 years and convexity of 210. A 2% decre...

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