A client of yours, Walter White, sent you a memo expressing interest in investing in corporate bonds from Gamestop. Gamestop Bonds have a 5% coupon rate with 3 years to maturity and a $100 face value. The yield curve is flat at 3.5% per annum and the bond pays coupons semi-annually. Walter is asking you for your expert opinion on whether investing on that bond makes sense. To undertake this task, you need to: (i) Compute the current bond price. [2 marks] (ii) Compute the duration based on a 105-basis point rate shock. How did you select that basis point? [50 words] [3 marks] (iii) Compute the bond's Macaulay Duration, [3 marks] (iv) Compute the bond's Modified Duration, provide to Walter an interpretation of the Duration measurements [100 words] [2 marks] (v) The duration measurement by itself is having some limitations What are those limitations and how can someone somewhat tackle them? [100 words] [5 marks] (vi) Compute the approximate percentage price change using duration and the convexity adjustment if the yield changes by 100 basis points and interpret the results to your client Walter. What would you recommend to him? [100 words] [10 marks] [TOTAL: 25 MARKS]