A semi-annual coupon paying bond,

Annual Coupon Rate

6.00%

Payment per year

2

FaceValue

Years to maturity

$1,000

6

Required return (APR)

5.00%

Duration = 5.152 years

1.If the market rate rises by 0.25%, use TVM to compute new bond price, and % change in bond price

2.Use to calculate % change in bond price

3.Compare 1 vs. 2

4.If the market rate rises by 0.75%,, use TVM to compute % change in bond price

5.Use to calculate % change in bond price

6.Compare 3 vs. 4