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    Convexity of the bond

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    Calculate the convexity of the ABC bond

    Company Maturity (years) Coupon (%) Price Yiled to Maturity (%)
    ABC 4 10 98 10.63
    DEG 8 9 87 11.53
    GHI 22 11 102 10.76
    JKL 28 10 90 11.17

    Suppose market interest rates change by 50 basis points. Estimate the new price of the ABC bond using the follosing:
    a. Duration only
    b. Duration and convexity

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    https://brainmass.com/business/bond-valuation/convexity-bond-346571

    Solution Summary

    Convexity of a bond is examined for ABC.

    $2.19

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