A two-year bond with par value $1,000 making annual coupon payments of $94 is priced at $1,000.

a. What is the yield to maturity of the bond? (Round your answer to 1 decimal place.)

Yield to maturity %

b. What will be the realized compound yield to maturity if the one-year interest rate next year turns out to be (a) 7.4%, (b) 9.4%, (c) 11.4%?(Do not round intermediate calculations. Round your answers to 2 decimal places.)

Interest Rate

Realized YTM

7.4

%

%

9.4

%

%

11.4

%

%

A bond currently sells for $1,090, which gives it a yield to maturity of 8%. Suppose that if the yield increases by 25 basis points, the price of the bond falls to $1,055. What is the duration of this bond? (Do not round intermediate calculations. Round your answer to 4 decimal places.)

Duration

Find the duration of a 7% coupon bond making annual coupon payments if it has three years until maturity and a yield to maturity of 7.4%. What is the duration if the yield to maturity is 11.4%? (Do not round intermediate calculations. Round your answers to 4 decimal places.)

YTM	Duration
7.4% YTM
11.4% YTM