The asked quotes in July 2015 for three Treasury securities are shown below. These securities are noncallable. Assume an interest payment was just paid on the bond and note. The face value of each security is $1,000.

Friday, July 31, 2015:

T-Note
Maturity	Coupon	Bid	Asked	Chg	Asked Yield
7/31/2019	0.875	98:0675	98:0725	0:0875	?????

Assume settlement is Tuesday, August 4, 2015 for T-note; so days to maturity is 1,456 days.

T-Bond
Maturity	Coupon	Bid	Asked	Chg	Asked Yield
1/31/2021	2.125	102:055	102:06	0:13	?????

Assume settlement is Tuesday, August 4, 2015 for T-bond; so days to maturity is 2,006 days.

T-Bond, Stripped Principal
Maturity	Bid	Asked	Chg	Asked Yield
1/31/2022	88.581	88.637	0.291	?????

Assume settlement is Tuesday, August 4, 2015 for T-bond Strip; so days to maturity is 2,371 days.

Remember that Treasury bonds and notes are quoted in 32nds. That is, a quote of 101:165 is 101 16.5/32 = 101.515625% x $1,000 = a price of $1,015.15625 or $1,015.16. Strips are quoted as a % of 100.

Using the above information, for each security perform the following:

Calculate the yield to maturity. This should be an annual rate. Round to 3 decimal places.

Assume the yield to maturity rises a full 1 percent. Calculate the new asked price.

Calculate the securitys' duration (in years) using the YTM calculated in #1.

Calculate the convexity of the security using the YTM calculated in #1.

Assuming the YTM of the security increases a full 1 percent,

Determine the "duration-estimated" new price. Compare with your results in #2. Explain what has happened.

Determine the "duration-plus-convexity-estimated" new price. Compare with your results in #2 and #5a. Explain what has happened.