Question #1 Assume that a straight bond has approximate duration of 1.89 and a convexity of 32. If interest rates decline by 65.5bp what is the total estimated percentage price change of the bond? Question #2 Question #2 A non-callable bond with 192 months remaining maturity has a semi-annual coupon of 5.5% and a $1,000 par value. The yield to maturity on the bond is 4.8%. Which of the following is closest to the estimated price change of the bond using duration if rates rise by 75 basis points? Question #3 XXX bonds currently sell for $875. The coupon rate is 12% paid quarterly. They have 15.5 semesters till maturity, and a $1,000 par value. They can be called in 5.25 years at $1,030. What is the difference between this bond's YTM and its YTC? Question #4 YYY bonds have a 12-year maturity, $1,000 par value, and a 6% coupon paid semi-annually, and those bonds sell at their par value. ZZZ bonds have the same risk, maturity, and par value, as YYY bonds, but the ZZZ bonds pay a 4% monthly coupon. Neither bond is callable. At what price should the monthly payment bond sell? Case 1: A bond with 5 years remaining until maturity is currently selling for 101 per 100 of par value. The bond offers 6% coupon rate with interest paid semi-annually. The bond is first callable in 3 years, and is callable after that date on coupon dates according to the following schedule: End of Year 3 Call price 102 101 100 5 Question #5 (related to case 1) Calculate the yield to first call Question #6 (related to case 1) Calculate the yield to second call Case 2: A 5-year, 5% semiannual coupon payment corporate bond is priced at 104.967 per 100 of par value. The bond yield to maturity based on a semiannual bond basis is 3.897%. Question #7 (related to case 2) An analyst is asked to convert this bond to a monthly periodicity. Under this conversion, compute the YTM? Question #8 (related to case 2) An analyst is asked to convert this bond to a daily periodicity. Under this conversion, compute the YTM