Assignment 4 --- Saved View Tell me Aanbod Abede Aa BbceDeCD AaBb C DE ABAND Normal No Spacing Heading 2 Tit Sub Emphasis Reinvestment risk is the risk that cash flows will have to be reinvested at an interest rate lower than the calculated yield to maturity 12. Calculate the requested measures for bonds A and B (assume each bond pays interest semiannually): A B Coupon 8% T 9% Yield to Maturity 8% 8% Maturity (Years) 2 Par 100.00 100.00 Price 100.00 104.055 5 a. Calculate the duration for the two bonds by changing the yield up and down 25 basis points. b. Calculate the duration for the two bonds by changing the yield up and down by 10 basis points. c. Compare your answers to part (a) and (b). 15. What is the difference between modified duration and effective duration