What are its macaulay-modified duration and convexity

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a) A 4-year 12% coupon bond has a yield of 10%. What are its Macaulay, Modified duration, and convexity?

b) What is the actual price change, Modified Duration predicted and Modified Duration + convexity predicted change in price for an increase of 50bps in the yield. Assume a flat term structure before and after the increase and annual coupons. (Note: For convexity do not use effective convexity measure)

Reference no: EM131324823

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