Part 1

TRX Inc.s $1,000 face value 9% coupon bond has remaining maturity of 11 months. It pays coupon every 4 months. Annual interest rates for upcoming coupon payment dates are 8%, 11%, and 10% and the current yield curve downward slopping. Calculate the duration of the bond.

Part 2

A U. S. investor purchased Canadian securities for Canadian $2,000 one year ago when the Canadian dollar cost US $0.75. Currently the market value of the securities is Canadian $2,400 and dividend yield is 3% for the investment period. What is the rate of return if Canadian $ is worth US $0.73 now?