A two-year amortizing bond has a coupon rate of 4% and pays its coupons semi- annually. Coupon payments are based upon the outstanding face value at the start of the coupon period. It has a face value of £200 and £50 of the face value is amortized every half year. The yield to maturity is 1% per year.
What is the price, duration and convexity of the bond?
