Calculate the effective duration of a bond


Problem 1: Calculate the effective duration of a bond to a 100 basis point change in interest rates with a 6-1/4 coupon, 10-years remaining to maturity, and an asking quote of 110.7811 (decimal, not 32nds).

Problem 2: Calculate the effective convexity to a 100 basis point change of the bond in Question above.

Calculate the total percentage price change (duration and convexity) to a 65 basis point decrease in interest rates for the bond in Questions (1) and (2).

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Finance Basics: Calculate the effective duration of a bond
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