Consider a semi-annual coupon bond with an annual coupon of 5 percent, five years to maturity, and a current price of $1,015. Suppose the yield on the bond suddenly increases by 3 percent. Use duration to estimate the new price of the bond.

a) What is the yield to maturity of the bond?

b) What is the duration of the bond?

c) What is the modified duration of the bond?

d) What is the estimated percent change in price?

e) What is the estimated new price of the bond?