Question 3 of 5

A bond maturing in 30 years was sold at $1,768.62 as the required rate of return was 5%. Coupon rate was 10%. Like in the previous example, interest rates changed immediately after this to 2%. Estimate the percentage change in the bond price.

A. 10.2%

B. 57.8%

C. 68.3%

D. none of the above.

Question 4 of 5

A 10% coupon corporate bond maturing in 2 years is selling at $1,040. What is the duration of this bond?

A. 1.812 years.

B. 1.836 years.

C. 1.909 years.

D. 1.911 years.

Question 5 of 5

Bond A has duration of 5.6 years, and Bond B has duration of 30 years. If your portfolio is 90% bond A and 10% bond B, what is the duration of your portfolio?

A. 8.04 years.

B. 17.8 years.

C. 27.56 years.

D. 35.6 years.