MCQ (Need Working)

Calculate the duration of a $1000 face value, 10% coupon bond with 3 years to maturity it the YTM is 12% semiannually. Calculate the duration of this bond. Calculate the new price of the bond if YTM increases by 70 basis points.

1. Calculate the duration of this bond. (Nearest approximate value)

A)2.725 years

B)2.725%

C) 2.43 years

D) 2.43%

E) 2.34 years

2. Calculate the new price of the bond if YTM increases by 70 basis points. (Nearest approximate value)

A) $968.12

B) $933.85

C) $970.02

D) 935.75

(Need Working)