Use the same set of data to answer questions 13-15. Complete your calculation in Excel.
Par value
$100.00
Coupon rate
4%
Frequency
2 per year
Yield-to-maturity 6%
Term to maturity 3 years
If the yield increases by 1%, how will the duration and convexity impact the bond price?
The price will increase by $3.42.
The price will increase by $5.44.
The price will decrease by $4.75.
The price will decrease by $2.58.