Question $4$

Suppose ABC Bank purchased GHS $20$ million of such bonds and the yield to maturity of the

bond is $15\%$ on the market:

i$.$ Calculate the duration of the bond.

ii$.$ An analyst with ABC Bank forecasts that the interest rate will rise by $0\mathrm{.}5\%$ next

month. What is the change in the price of the bond?

iii. Estimate the percentage change in the price of the bond.

iv$.$ What is the dollar change in the price of the bond?

v$.$ Calculate the new price of the bond on the market.