For two bonds, Bond A and Bond B, each with a term of 10 years,...
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For two bonds, Bond A and Bond B, each with a term of 10 years, you are given: Bond A has an effective duration of 7.1. Bond B has an effective duration of 5.5. The difference between the convexity of Bond A and that of Bond B is 80. If interest rate decreases by 0.1%, the price of Bond A will increase by 0.7133%. Calculate the percentage price increase for Bond B if interest rate decreases by 0.1%. O(A) 0.15% O(B) 0.25% O(C) 0.35% OD) 0.45% O(E) 0.55%
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