Question 1: You just purchased a bond with a $1,000 par value and an 11.0% coupon rate that pays interest annually. The bond has two years remaining to maturity and has a 10.0% yield to maturity. Using a financial calculator, determine the price of the bond. Identify/show the keystrokes you used to get your answer. Using the HP 12C for example: n=10, i=5, etc. Check figure: Price = $1,017.36. Question 2: Assume now that the bond described in question 1 pays interest semi-annually. Determine the price. Show the keystrokes used. Question 3: Using the information from question 1 and the formula from your textbook, determine the duration (DUR) of this bond. Show your calculations used in arriving at your answer. Check figure: duration = 1.90 years. Question 4: Given your answer from question 3, determine the modified duration (DUR*).

Question 5: Again, using the bond information from question 1, now assume that it is a zero coupon bond. Find this bond's duration (DUR). Show your work.