(1)

At an interest rate is 4.0%, a 30-year loan with 10,000 year-end payments has the same present value as a 20-year bond with annual coupon payments with coupon rate 3.5% that the bond is redeemed for face value.

Find the face value of the bond. Face value: ___________

(2)

(3)

How many monthly payments of 1,000 does it take to accumulate 120,000, using end-of-month deposits in an account that earns 4.8% compounded monthly?

Number of payments: ___________

The table below shows the present value, modified duration, and convexity of a portfolio at 4.00% yield: (in millions) Present Value Modified Duration Convexity Portfolio 100 13.3 221.4 If the interest rate changes to 5.00%, estimate the present value of the portfolio (your formula should use all values provided) Portfolio price