Question: 2: Bond Valuation Post Interest Rate Shift A bond has been procured at its face value, implying it's trading at par. This bond offers an
2: Bond Valuation Post Interest Rate Shift A bond has been procured at its face value, implying it's trading at par. This bond offers an annual coupon of 1% and is set to mature in a precise span of five years. a) Ascertain its price if, mere hours post-acquisition, the prevailing market interest rate surges by 25 basis points. b) Determine its valuation if, shortly after its purchase, the market interest rate plunges by 25 basis points. c) Elucidate the mean percentage fluctuation in the bond's price given a 25 basis point shift in the market interest rate. For each part, kindly provide the solution using Excel, ensuring to show formulae, and also offer an algebraic breakdown using the pertinent financial mathematics
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