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3. Consider a two-year maturity inverse floating-rate bond. Its coupon reset formula is 10%- LIBOR. Its discount rate is LIBOR+2%. Discount rate of fixed cash

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3. Consider a two-year maturity inverse floating-rate bond. Its coupon reset formula is 10%- LIBOR. Its discount rate is LIBOR+2%. Discount rate of fixed cash flows is 5%. (10, 15, and 15 points respectively) a. What is the price of this inverse floater? b. What is the modified duration of this inverse floater? c. What is the convexity of this inverse floater

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