Consider following characteristic of a bond Time to Maturity: 4 years Coupon Payment: Semi-annual Coupon Rate: 5.5% Par Value: $1,000 YTM (in annual): 6% a. What the current price and Macaulay's duration of this bond given the information? b. Due to pandemic and low inflation, economic situation has changed, and following term structure of interest rate is expected as follows: Period 1 2 3 4 5 6 7 8 6-month Rate 1.50% 1.70% 2.60% 3.60% 4.70% 3.20% 2.90% 1.73% Using these new estimates for each period, what is the new price of the bond and new YTM (in annual term)? (Hint: consider applying different discounting rate for each period) c. Assuming that the YTM indeed changed from original YTM of 6% to calculated YTM from part b, the amount of price change expected using ONLY modified duration should have been dollar increase. d. Without any exact calculation of Convexity, notice the discrepancy between the actual price change resulted from term structure change versus the price change expected from duration only. If you were to be an investment advisor for this specific bond, would you recommend this bond to your client given that your research indicates the overall yield will be lower