A recently issued bond that pays a semi-annual coupon of 8% has a principal of $ 1,000.00 with a life of 1 year and a YTM of 6%. The Macaulay Duration of the bond is 0.9809 and its convexity is 1.3780. If the yield goes from 6% to 6.5%, then the phrase that best describes the price change of the bond is:
a) The change in the price of the bond is -4.83 and the prediction according to the formula that adapts both convexity and duration is -4.73.
b) The change in the price of the bond is -5.05 and the prediction according to the formula that adapts both convexity and duration is -4.85.
c) The change in the price of the bond is -4.83 and the prediction according to the
formula that adapts both convexity and duration is -4.83.
I solved but I had another number: -4.7262