Bonus question (2pts on top of the initial 12): you own a 30 year treasury bond on of

4%

, a f of

$100

and a current price of

$106

. The bond has 30 years of maturity left. You hold it for six months and tl receive one coupon.\ Assuming that rates have increased by

1ppt

, what is the return on your investment in annual terms? Hint: first find the rate initially. Then use this rate plus 1 ppt to figure out the new price of the bond. Remem coupons are paid twice a year.\

-0.37%

.

13. Bonus question (2pts on top of the initial 12): you own a 30 year treasury bond C (Ctrl) - on of 4%, a f of $100 and a current price of $106. The bond has 30 years of maturity left. You hold it tor six months and receive one coupon. Assuming that rates have increased by 1ppt, what is the return on your investment in annual terms? Hint: first find the rate initially. Then use this rate plus 1ppt to figure out the new price of the bond. Remen coupons are paid twice a year. 0.37%