.Any Tutor please..

. The following questions appeared in past C Examinations. Give a brief explanation for each of your answers. (a) Which set of conditions will result in a bond with the greatest volatility? i. A high coupon and a short maturity. ii. A high coupon and a long maturity. iii. A low coupon and a short maturity. iv. A low coupon and a long maturity. (b) An investor who expects declining interest rates would be likely to purchase a bond that has a . .. coupon and a . . . term to maturity. i. Low, long. ii. High, short. iii. High, long. iv. Zero, long. (c) With a zero-coupon bond: i. Duration equals the weighted average term to maturity. ii. Term to maturity equals duration. iii. Weighted average term to maturity equals the term to maturity. iv. All of the above. 60. Please circle your answer to the following questions and provide a one-line explanation. (a) Holding the one-year real interest rate constant, if the nominal one-year interest rate where to increase by 1%, it would imply that the inflation rate over the same period i. Increased. Fall 2008 Page 25 of 66 ii. Declined. iii. Stayed the same. iv. It can go either way, impossible to tell from the provided data. (b) Consider two treasury bonds, A and B. Both have 5 years to maturity, A pays a 5% coupon rate, B pays a 7% coupon rate. Which of bonds A and B has higher modified duration, i. A. ii. B. iii. The same for A and B. iv. It can go either way, impossible to tell from the provided data. (c) A ten-year bond with a coupon rate of 6% and a face value of $100 is priced at $98. Let the yield to maturity be denoted by y. Which of the following statements is true: i. y > 6%. ii. y