Question: 1. Bond maturity 4 Years initial interest rate = 4.00% Coupon Rate 3.00% Annual Coupon Face Value $1,000.00 Dollar Coupons $30.00 Given the information in

1.

Bond maturity 4 Years initial interest rate = 4.00%
Coupon Rate 3.00% Annual Coupon
Face Value $1,000.00
Dollar Coupons $30.00

Given the information in the table, what is the price effect in year 3 if the interest rate changes from 4.00% to 6.00% ?

2.

Bond maturity 4 Years initial interest rate = 5.00%
Coupon Rate 6.00% Annual Coupon
Face Value $1,000.00
Dollar Coupons $60.00

Given the information in the table, what is the price effect in year 2 if the interest rate changes from 5.00% to 4.00% ?

3.

Bond maturity 4 Years initial interest rate = 4.00%
Coupon Rate 3.00% Annual Coupon
Face Value $1,000.00
Dollar Coupons $30.00

Given the information in the table, what is the reinvestment effect in year 3 if the interest rate changes from 4.00% to 5.00% ?

4.

Bond maturity 4 Years initial interest rate = 3.00%
Coupon Rate 7.00% Annual Coupon
Face Value $1,000.00
Dollar Coupons $70.00

Given the information in the table, what is the reinvestment effect in year 3 if the interest rate changes from 3.00% to 4.00% ?

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