Year Spot Rate scovnf insividval 5.90% 6.40% 6.60% 6.90% 7.30% Arbitrage free pricing bonds 5 | 15. Consider a bond with duration equal to 7 years, semiannual coupons and YTM of 10%. Assume that you expect the bond's YTM to decline by 50 basis points (e.g. from 10% to 9.5%). Find the percentage change in the price of the bond 00P Ar considering a) Duration alone reat Art% conv ar 16. Suppose you hold a 5% coupon bond maturing in 5 years yielding 5% and a duration YTM of454 years. The interest rates increase from 5% to 6% immediately after you purchase the bond. If you sell the bond after 3 years, and receive a 6% interest Ac income on the annual coupon payments, the actual rate of retur ARRis IS: 7. A bond has a current price of $1,030. The yield on the bond is 8%. If the yield tteeill go doun to S1 025 88 hased