12. Calculate the requested measures for bonds A and B (assume each bond pays interest Semi-Annually:

Bond A: Coupon: 8%, YTM: 8%, Maturity (in years): 2, Par: 100.00, Price:100.000

Bond B: Coupon: 9%, YTM: 8%, Maturity (in years): 5, Par: 100.00, Price:104.055

A: Calculate the duration for the two bonds by changing the yield up and down 25 basis points.

13. For Bonds A & B in the previous Question:

B: Using duration, estimate the price of bonds for a 100 basis point increase in yield

C: Using both duration and convexity, estimate the price of the bonds for a 100 basis point increase in yield.

* Answer all these questions by hand (written) showing all the formulas *