Question
12-A.) You own a bond portfolio worth $39,000 with a modified duration of 5.1 years. You believe the interest rate will decrease by 0.3% soon.
12-A.) You own a bond portfolio worth $39,000 with a modified duration of 5.1 years. You believe the interest rate will decrease by 0.3% soon. Predict the new value of your bond portfolio after this interest rate change.
Round to the nearest $ amount. For example, if your answer is 12,345.67, then enter "12346". Margin for error: +/- 10
12-B.)Calculate the price of a 8-yr 2% semiannual bond with a par value of $100 and 8% yield to maturity (interest rate).
Round to the nearest 2 decimal points. For example, if your answer is 123.4567, then enter "123.46", Margin for error: +/- 0.05.
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