2. You own a convertible bond that pays annually, has a 4% yield, 7.5% coupon rate, and matures in 10 years. The conversion ratio is 20. The stock price is $43. What is your gain or loss if you convert? What is the minimum stock price to convert this bond? Ans: loss of 423.88 / convert if stock price is greater than 64.19 3. A bond is 1 year from maturity, pays semiannually, has an 8% coupon rate and a 4% YTM. Calculate the duration of this bond. Ans: 0.98