1.A sixyear annual bond with yield of 4% provides a 5% coupon at the end of each year. Use duration and convexity to estimate the effect of a 1% increase in the yield on the price of the bond. Suppose the Par = $100. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16)

a. The bond's price is $ Incorrect answer:________ .

b. The Maculay Duration of the bond is Incorrect answer:______ .

c. The convexity is Incorrect answer: _____ .

d. The %price change is Incorrect answer: ____ % if there is a 1% increase in the yield.

2.

Two years ago, you bought a 10-year, 6% annual coupon payment bond when its yield-to-maturity was 8%. Right after you purchased this bond, the yield-to-maturity on this bond increased to 9% and stayed at the same level in the next two years. You reinvested the coupon payments at the market rate of 9%. You just sold the bond at 9% yield-to-maturity. Your annualized holding period return is _____%. Your capital loss is _______. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16)