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An 11-year maturity zero-coupon bond selling at a yield to maturity of 6.25% (effective annual yield) has convexity of 158.7 and modified duration of 10.06 years. A 30-year maturity 8.5% coupon bond making annual coupon payments also selling at a yield to maturity of 6.25% has nearly identical duration10.04 yearsbut considerably higher convexity of 255. a. Suppose the yield to maturity on both bonds increases to 7.25%. What will be the actual percentage capital loss on each bond? What percentage capital loss would be predicted by the duration-with-convexity rule? (Input all amounts as positive values. Do not round intermediate calculations. Round your answers to 2 decimal places.) Zero Coupon Bond Coupon Bond % Actual Predicted % % % b. Suppose the yield to maturity on both bonds decreases to 5.25%. What will be the actual percentage capital loss on each bond? What percentage capital loss would be predicted by the duration-with-convexity rule? (Input all amounts as positive values. Do not round intermediate calculations. Round your answers to 2 decimal places.) Actual Predicted Zero Coupon Bond Coupon Bond % % % % An 11-year maturity zero-coupon bond selling at a yield to maturity of 6.25% (effective annual yield) has convexity of 158.7 and modified duration of 10.06 years. A 30-year maturity 8.5% coupon bond making annual coupon payments also selling at a yield to maturity of 6.25% has nearly identical duration10.04 yearsbut considerably higher convexity of 255. a. Suppose the yield to maturity on both bonds increases to 7.25%. What will be the actual percentage capital loss on each bond? What percentage capital loss would be predicted by the duration-with-convexity rule? (Input all amounts as positive values. Do not round intermediate calculations. Round your answers to 2 decimal places.) Zero Coupon Bond Coupon Bond % Actual Predicted % % % b. Suppose the yield to maturity on both bonds decreases to 5.25%. What will be the actual percentage capital loss on each bond? What percentage capital loss would be predicted by the duration-with-convexity rule? (Input all amounts as positive values. Do not round intermediate calculations. Round your answers to 2 decimal places.) Actual Predicted Zero Coupon Bond Coupon Bond % % % %

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