1. Price a 2-yr 4.9% semiannual coupon bond with a par value of $100.Yield to maturity (discount rate) of the bond is 5.7%.
2. Suppose a 7-yr semiannual bond with $1,000 par has 2% coupon rate.Calculate the payment of each coupon.
3. Suppose the value of yourbond portfolio is$500,000.It has a duration of13.9years.In 2 months,the interest rate increases by0.47%.Estimate how much your bond portfolio will be worth in 2 months.(margin for error:+/-500)

4. Which of the following isNOTan example of active portfolio management?

asset-liability swap

intermarket spread swap

rate anticipation swap

substitution swap