The price quote of the Discovery Cafe Bond should be 102.000000

	Quote	$10,000 Bond
Base Price:	102.000000	$10,200.00
62/180 days accrued interest:	1.033333	$103.33
Invoice Price:	103.033333	$10,303.33
Yield to Maturity:	5.41186%

The last paragraph should read:

The convexity of the bond at 5% is calculated as 1,021 yr2.. We can see that the duration of 17.0 years, relevant when the bond is priced to yield 5%, becomes increasingly irrelevant as we move away from the 5% valuation, from 12.1 years at 8% to 24.0 yrs at 2%.

Question 15-4

Calculate the percentage price change on a 4.0% corporate bond maturing 30 November 2020 to a 1½% increase in yield. The bond is quoted at 102.500 to settle 15 April 2013. The duration is calculated as 6.5664 yrs and the convexity at 50.8725.

Question 15-5

Calculate the percentage price change on a 4.0% corporate bond maturing 30 November 2050 to a 1½% increase in yield. The bond is quoted at 102.500 to settle 15 April 2013. The duration is calculated as 19.6854 yrs and the convexity at 575.7889.