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MLK Bank has an asset portfolio that consists of $60 million of 30-year, 6 percent coupon, $1,000 bonds with annual coupon payments that sell at

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MLK Bank has an asset portfolio that consists of $60 million of 30-year, 6 percent coupon, $1,000 bonds with annual coupon payments that sell at par a-1. What will be the bonds' new prices if market yields change immediately by + 0.10 percent? a-2. What will be the new prices if market yields change immediately by 12.00 percent? b-1. The duration of these bonds is 14.5907 years. What are the predicted bond prices in each of the four cases using the duration b-2. What is the amount of error between the duration prediction and the actual market values? rule

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