If the effective duration of a $455.4 million portfolio of bonds is 10 and its...
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Finance
If the effective duration of a $455.4 million portfolio of bonds is 10 and its approximate convexity is 250, in dollars terms, how much will the portfolio change in value if interest rates increase 200bps from 7% to 9%? (Hint: use both duration and convexity to estimate the change in the value of the portfolio, pick the closest answer)
Group of answer choices
+$70 million
+$45 million
-$70 million
+$140 million
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