mbassador Bank has purchased bonds for $90 million that has a par value of $100 million, 10 years remaining to maturity, and a coupon rate of 5% annually. It expects that required rate of return on these bands to be 4% five years from today.

A. At what price (PV) could Ambassador Bank sell these bonds five years from now?

B. What is the realized yield on the bonds over the next five years, assuming they are to be sold in five years?

C. Calculate duration of this bond.

D. Using duration, if market rate changes by 1%, how much price of this bonds will change if it was purchased at par.

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