1. A bond has a face value of $1000, coupon rate of 8% per annum and a yield to maturity of 9%. The bond will mature in 6 years.

1. Determine the price of the bond. [4 marks]
2. Calculate the duration of the bond. [6 marks]
3. Assume that the interest rates on the decline to 8.25%; what would be the (%) price change of the bond? [4 marks]
4. Calculate the new price of the bond after the interest rate change. [4 marks]