Question 15 A 5-year bond with a yield of 4% (continuously compounded), with a face value of $100, pays an 3% coupon at the end of each year. Use the duration from the previous question to calculate the effect on the bonds price of a 0.1% decrease in its yield. What is the new bond price? (Remember if the yield goes down what happens to the the bond price?) 10 points

B) A 5-year bond with a yield of 4% (continuously compounded) pays an 3% coupon at the end of each year. Check the results from your previous duration calculation the long way. Recalculate the bonds price at the new rate or on the basis of a 3.9% per annum yield (meaning it was reduced by .1%) and verify that the result is in agreement with your answer to the previous question. Show your work.