Questions 1. Calculate the requested measures in parts (a) and (b) for bonds A and B (assume that each bond pays interest semiannually): B Coupon rate 8% 9% Yield to maturity 8% 8% Maturity (years) 2 5 Par $100.00 $100.00 (a) Macaulay duration (4 points) (b) Modified duration (2 point) 2. Consider a bond selling at par (assume par = $1,000) with Macaulay duration of 4.15 years and YTM of 8%. What is the effect on the bond price if the YTM goes to 10%? Please calculate: (1) relative price change (2 points) AP == - D* Ay P (2) dollar price change (1 point) (3) approximated new bond price with at YTM 10% (1 point)