5. A nine-year bond has a yield of 10% and a duration of 7.210 years. If the bond's yield increases by 25 basis points, what is the percentage change in the bond's price as predicted by the duration formula? (Use equation 11.2 in the text) Chapter 12 6. If the nominal interest rate is 10% and the inflation rate is 5%, what is the real interest rate? 7. Company A has fixed costs of $9 million and profits of $6 million. Its competitor, Company 8, is roughly the same size and this year earned the same profits, $6 million. But it operates with higher fixed costs of $10 million and lower variable costs. What is the degree of operating Taverage (DOL) for each company? (Defined here as 1+ Fixed costs/Profit.) Which firm has higher operating leverage? Which firm will likely have higher profits if the economy strengthens