Problem 5 A $100,000 5-year bond with a yield of 10% pays an 7% coupon at the end of each six months. Time Cash Flow PV of CF Weights Time x Weights 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 Sum (a) Complete the table above. Provide 5 decimals precision. What is the bond's valuation? (b) Estimate the Macauley duration for this bond and use it to calculate approximately the effect on the bond's price of a 7 basis point decrease in the bond yield. (c) Estimate the convexity for this bond and use it to calculate approximately the effect on the bond's price of a 100 basis point increase in the bond yield. (d) You are planning to hold the bond for 2 years and will sell it right after cashing the fourth coupon. Right after you purchase the bond, the yield to maturity decreases by 150 basis point and remains at this value for 2 years. What would be your realized rate of return overall on this investment