Consider a $$100$ par value bond that has an $8\%$ coupon rate, pays a semi$-$annual coupon, matures $2$ years from today, and is priced to yield $6\%.$ Calculate the Macauly and modified durations as a present value weighted average of the time to maturity.

 

For the bond above, estimate the percent and dollar price changes associated with a $0\mathrm{.}5\%$ increase in yield.

For the bond above, calculate the dollar duration and the price value of a basis point. 

Answer rating: 100% (QA)

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