A corporate bond with a coupon rate of 6% has been issued at a price of K102.50 and k100.00 nominal and it is redeemable at its par value of K100.00 at the end of year 5. the bond pays coupon interest annually.

Reguired

Calculate the bonds yield to maturity

calculate the bonds macaulay duration and state the impact of the bonds price of an increase in interest rates by 50 basis points