Consider a $1,000 par value bond, with a coupon rate of 10% per year, with 8 years until maturity and current yield to maturity of 11% (flat yield curve). An investor is interested to measure the reinvestment risk of this bond. By how much the future value of all the coupons and par value would vary (at maturity) if the yield curve shifted just before the first coupon payment to either down to 8% or up to 14% (and still remains a flat yield curve)? And by how much the yield to maturity would vary?

$294.42; 4.85%

$256.62; 1.65%

$301.82; 5.15%

$265.52; 2.15%

$286.12; 3.45%