Q1 -TRUE OR FALSE The price of an asset with a long duration is more sensitive to changes in interest rates, than the price of an asset with a short duration Q2-TRUE OR FALSE Bond prices move in the opposite direction of interest rates. Q3 TRUE OR FALSE For two bonds with the same maturity and yield to maturity, a bond with a large coupon will have a longer duration than a bond with a small coupon Q4-TRUE OR FALSE Duration of a coupon bond is less than the maturity of the bond. Q5-TRUE OR FALSE Duration of a zero coupon bond is equal to the maturity of the bond. Pl. (5 points) Find the Duration of a 3-year, 3% annual coupon bond that sells at a yield to maturity of 5%. Duration years P2. (5 points) Find the new price of a bond with a modified duration of 10years if interest rates decline by 5 basis points and the bond price was S670 before the interest rate change. New Bond Price S P3. (5 points) A 30-year maturity bond pays a coupon of 7% once per year and has a face value of S1,000. Its yield to maturity is presently 5%- Ower the upcoming year, you expect interest rates to increase and that the yield to maturity on this bond will be 6% a year from now. Using horizontal analysis, calculate the return you expect to earn by holding this bond over the upcoming year. Holding Period Return S