Question: 9, ( 10 points ) You are holding a 2 - year 10% ( annualized ) coupon bond with face value $ 1 , 000

9, ( 10 points ) You are holding a 2 -

9, ( 10 points ) You are holding a 2 - year 10% ( annualized ) coupon bond with face value $ 1 , 000 now . The interest rate now is 5% ( semi - annual ) . However , the interest rate increases to 5 . 5% ( semi - annual ) tomorrow . What is the Macaulay Duration now ? What is the Modified Duration now ?" When the interest rate ( semi - annual ) increases to 5 . 5% tomorrow , what is the actual price change in this bond ? And what is the bond price change using modified duration approximation ? Which one is larger in absolute value

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