4. A 5-year bond with a yield of 12% and face-value equal to $1000 pays an 8% coupon at the end of each year.

a) What is the bond's price?

b) What is the bond's duration?

c) Use the duration to calculate the effect on the bond's price of a .2% increase in its yield.

d) Recalculate the bond's price on the basis of a 12.2% yearly yield.