What is the price of the following US T-Bond? (Use any method you prefer)

Face value: $100

Maturity: 7 years

Coupon rate 2.5% (paid annually)

Yield = 7.5%

Answer : 73.52

Suppose you observe that the above bond is trading at $83.00. What is the yield?

Yield:

Calculate the price, duration, and modified duration of this bond when the yield is 9% (Enter all answers with two decimal places).

Price:

Duration:

Modified Duration:

Suppose the yield for the bond from the previous question increases by 1 percentage points. Without re-calculating the price, what is the expected change (in %) in the bonds price? That is, what is the expected percentage change using the Duration approximation? What would be the new price predicted by (modified) duration?

Expected change:

New price: