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1) (2 pts) What is the current price of a $1,000 face value, 6% coupon bond that pays interest semi- annually if the bond
1) (2 pts) What is the current price of a $1,000 face value, 6% coupon bond that pays interest semi- annually if the bond matures in ten years and has a yield-to-maturity of 5.25% (Compounded semi-annually) 2) (2 pts) A bond has a YTM of 6.5%, a modified duration of 17.43 years, a duration of 18 years and a 25 year maturity. By what percentage will the bond's price change if market interest rates increase by 1%? 3) (2 pts) A portfolio consists of three bonds as follows Amount Invested Bond Duration Bond A $1,000 6.8 years Bond B $4,000 2.4 years Bond C $5,000 14.1 years What is the duration of the bond portfolio? 4) (4 pts) Today (4/15/24) you purchase a $1000 face value 7% coupon bond paid semi-annually, with a YTM of 6% (compounded semi-annually) and 10 years to maturity (matures on 4/15/34). a. What is the price you paid for the bond today? b. If interest rates remain constant and the YTM of the bond remains at 6% (SA), what will be the price of bond in 1 year on (4/15/2025)? C. $ If interest rates remain constant and the YTM of the bond remains at 6% (SA), what will be the price of bond in 2 years (4/15/2026)? d. If interest raes change and the YTM of the bond decreases to 5.2% (SA) in 2 years, what will be the price of the bond in 2 years (4/15/2026) if the YTM decreases to 5.2% (SA)? et
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