Suppose you just started at a prestigious fixed-income investment fund. Your supervisor asked you to do a few quick calculations for a bond that the firm might invest in. This bond has the following terms:

Face value = $1000

Coupon rate = 8% (coupons paid semi-annually)

Yield to maturity = 10% (annual rate, compounded semi-annually)

Time-to-maturity = 7 years

Calculate the price of the bond. Round to six digits after the decimal.

The bond price calculated in part 1.1 is the (flat/full) price

Calculate the modified duration of the bond based on annual yields. (i.e. use the approximation formula with 10% as y, 10.1% as y + y, and 9.9% as y y.) Round to four digits after the decimal

Calculate the convexity of the bond based on annual yields. (i.e. use the approximation formula with 10% as y, 10.1% as y + y, and 9.9% as y y.) Round to four digits after the decimal