(10 points) 6 Using annual compounding, find the duration of a 9-year 9% coupon bond that has yield of 10%. ( 5 points) [ If interest rates were to increase by 40 basis points, (i) what percentage change in price would you expect for the bond? (ii) Find the new price using the duration method. (5 points) (i) Using annual compounding find the duration. (ii) Which one is riskier? (5 points) [3 Bond D is selling at a discount. Bond P is selling at a premium. 6 Interest rates are thought to increase, which bond do you select? Explain. 8 Interest rates are thought to decrease, which bond do you select? Explain Hint: You may want to use a pricelyield curve as part of the explanation