How do I calculate YTM? I need to calculate it for this sort of bond:
A 10yr $1000 bond w/ a 5% annual coupon is selling for $784.36. The current prime rate is 8.25% (I'm using the prime rate to calculate the bond's clean price). It's Macauly duration is 7.82yrs. It's current yield is 6.37%.
How would I calculate it's YTM and it's convexity? What does duration and convexity actually mean? Thanks!!!! Also, why is duration in years instead of percent?