Q7(11 points): Interest rate risk of bonds Tom is a recent retiree who is interested in investing some of his savings in corporate bonds. His financial planner has suggested the following bonds. Bed B 10% 75 Bond 1296 13 Coupon rare Manurin (Yrs) Payment frequency Face value Yield to maturity Bond 79 15 2 $1,000 10% $1,000 70% $1,000 10" 1) (3 points) Calculate the price, Macaulay duration, and modified duration of each of the three bonds, and determine the type of each bond (use the drop-down list) 2) 2 points) Calculate the current yield for each bonds 3) (2 points) If the yield to maturity stays 10%. what will be the price of each band one year from now? What is the expected capital gains loss yield for each bond? What is the expected holding penod return over one year for each bond? 4) (2 points) Determine the percentage changes in the bond price to a 2 5 basis-point 10.025%) increase in the yield based on amly duration 52 2 points Based on results from (4), which hand react the most to the interest rate fluctuation { use the dop-down liar Varily thin result with Pregnate (Vior interest rate risk on slide page