Question 4 (i) Suppose a bond has 4 years to maturity, pays $15 interest each half year and is priced at $102. Give the formulae for the current yield of this bond and its yield to maturity. (ii) Is the yield to maturity from the formula in (i) less than, equal to, or greater than 4%? (Circle one) (iii) Give the formula for the volatility (or modified duration) of a zero coupon bond with 3 years to maturity and yield of 3%. (iv) Will the modified duration of this ZCB decrease, stay the same, or increase when this yield increases? (Circle one) Question 4 (i) Suppose a bond has 4 years to maturity, pays $15 interest each half year and is priced at $102. Give the formulae for the current yield of this bond and its yield to maturity. (ii) Is the yield to maturity from the formula in (i) less than, equal to, or greater than 4%? (Circle one) (iii) Give the formula for the volatility (or modified duration) of a zero coupon bond with 3 years to maturity and yield of 3%. (iv) Will the modified duration of this ZCB decrease, stay the same, or increase when this yield increases? (Circle one)