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A portfolio manager owns a bond that is currently priced at par value. The bond has a modified duration of 15 and a convexity statistic of 120. The portfolio manager is attempting to estimate what the bond’s price would be assuming its yield to maturity increased by 150 basis points. Using the duration plus convexity adjustment to estimate the percent change in price for this bond, what would be the estimated percent change in bond price assuming its yield to maturity increased by 150 bps?

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Financial Management, Finance

Category:- Financial Management
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