Problem $3-40($LG $3-4,$ LG $3-6)$

MLK Bank has an asset portfolio that consists of $$90$ million of $30-$year, $9$ percent annual coupon, $$1,000$ bonds that sell at par.

a$-1.$ What will be the bonds' new prices if market yields change immediately by $+-0\mathrm{.}10$ percent?

a$-2.$ What will be the new prices if market yields change immediately by $+-2\mathrm{.}00$ percent?

b$-1.$ The duration of these bonds is $11\mathrm{.}1983$ years. What are the predicted bond prices in each of the four cases using the duration rule?

$b-2.$ What is the amount of error between the duration prediction and the actual market values?

Complete this question by entering your answers in the tabs below.

Required A$1$

Required A$2$

Required B$1$

Required B$2$

What will be the new prices if market yields change immediately by $+-2\mathrm{.}00$ perc calculations. Enter all answers as positive numbers. Round your answers to $2$ de

$\backslash$table$[[,$Bonds' New Price$],[$At $+2\mathrm{.}0\%,],[$At $-2\mathrm{.}0\%,]]$

Problem $3-40($LG $3-4,$ LG $3-6)$

MLK Bank has an asset portfolio that consists of $$90$ million of $30-$year, $9$ percent annual coupon, $$1,000$ bonds that sell at par.

a$-1.$ What will be the bonds' new prices if market yields change immediately by $+-0\mathrm{.}10$ percent?

a$-2.$ What will be the new prices if market yields change immediately by $+-2\mathrm{.}00$ percent?

b$-1.$ The duration of these bonds is $11\mathrm{.}1983$ years. What are the predicted bond prices in each of the four cases using the duration rule?

$b-2.$ What is the amount of error between the duration prediction and the actual market values?

Complete this question by entering your answers in the tabs below.

Required A$1$

Required A$2$

Required B$1$

Required B$2$

The duration of these bonds is $11\mathrm{.}1983$ years. What are the predicted bond price rule? $($Do not round intermediate calculations. Enter all answers as positive num pla$$es$.($e$.$g$.,32\mathrm{.}16))$

$\backslash$table$[[,$Bonds' New Price$],[At+0\mathrm{.}10\%,],[At-0\mathrm{.}10\%,]]$