1. A 2 year bond that pays 4% semi-annual coupon was issued when the yield was 10%. If the yield goes up 35 basis point, what would be the predicted price of the bond?
2. A 5 year bond that pays 8% annual coupon was issued when the yield was 7.50%. If the yield goes down 65 basis point, what would be the predicted price of the bond?
3. A 5 year bond that pays 10% annual coupon was issued when the yield was 10%. If the yield goes up 55 basis point, what would be the predicted price of the bond?
4. A 3 year bond that pays 10% semi-annual coupon was issued when the yield was 12%. If the yield goes down 155 basis point, what would be the predicted price of the bond?
5. A 4 year bond that pays 7.5% semi-annual coupon was issued when the yield was 8%. If the yield goes down 55 basis point, what would be the predicted price of the bond?
6. Consider a 15 year 6.5% semi-annual coupon bond whose duration is approx. 9.50 years when required rate of return (yield to maturity) is 7.58%. Prove that this bond is immunized if you hold it for 9.50 years.
7. Consider a 20 year 7.20% annual coupon bond whose duration is approx. 11 years when required rate of return (yield to maturity) is 7.50%. Prove that this bond is immunized if you hold it for 11 years.
8. Consider a 10 year 6.50% annual coupon bond whose duration is 7.50 years when required rate of return (yield to maturity) is 6.50%. Prove that this bond is immunized if you hold it for 7.50 years.