1. Consider an 8% coupon, 30-year maturity bond with par value of $1,000. The current yield for this bond is 8%. Estimate capital gains if the yield goes to 14%
2. Estimate the current yield of this bond if the yield is 14 %.
3. A $1000 face value bond with a 20-year maturity and 9% semiannual coupon rate is callable in 10 years at a call price of $1,050. The bond currently sells at a yield to maturity of 8%, what is the yield to call?
4. A bond has a modified duration of 7 years. Suppose its yield increases from 8 percent to 6 percent. What happen to its price? (Or Goes up or down by how many percent)