Assume a 2-year coupon bond, with a $1000 face value, a coupon rate of 8%. If today's YTM is 6% and term structure is flat. Coupon frequency and compounding frequency are assumed to be annual. 

a) What is the value (in dollar amount) of this bond? 

 b) What are the $Duration, Modified duration, and the Macaulay duration of this bond, respectively?

 

c) What is the dollar convexity of this bond? (3 point) d) If interest rates increase by 2 percent, how much change in the bond value (dollar amount)? Use the duration measure only to estimate the absolute gain or loss. (2 points) e) If interest rates rise by 2 percent, how much change in the bond value (dollar amount)? Use the duration and convexity measures to estimate the absolute gain or loss. (3 points)