1. Use the following information for the questions. Assume 3 year annual coupon bond with coupon interest rate = 10%. Yield to maturity =5% and face value =100 $.

5-1) Calculate intrinsic value of this bond.

5-2) Explain the concept of modified duration and calculate it for the above bond.

5-3) Discuss convexity problem.

I'd appreciate it if you could answer. Thanks.