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2.8 Calculate the duration of a 6 percent, $1,000 par bond maturing in three years if...

2.8 Calculate the duration of a 6 percent, $1,000 par bond maturing in three years if the yield to maturity is 10 percent and interest is paid semiannually. b. (3 points) Calculate the modified duration for this bond.

2.9 Calculate the convexity of the bond in 2.8.

2.10 Given the results in 2.8 and 2.9, if the price of the bond before yields changed was $898.49, what is the resulting price taking into account both the effect of duration and convexity if yields decrease by 25 basis points?

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ANSWER IN THE IMAGE ((YELLOW HIGHLIGHTED). FEEL FREE TO ASK ANY DOUBTS. THUMBS UP PLEASE.

2.8 MD= 2.644

2.9 C= 8.58

2.10 Resulting Price= 904.45

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