Question: 1.) Briefly explain what will happen to a bonds duration measure if each of the following events occur. a.) The yield to maturity on the

1.) Briefly explain what will happen to a bonds duration measure if each of the following events occur. a.) The yield to maturity on the bond falls from 8.5% to 8%. b.) The bond gets 1 year closer to its maturity. c.) Market interest rates go from 8% to 9%.

2.) You are considering the purchase of a $1,000 par value bond with an 6.5% coupon rate (with interest paid semiannually) that matures in 12 years. If the bond is prices to provide a required return of 8%, what is the bonds current price?

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