Question: D = w, . -=-DX P -Dx (40+ AP = -D* Ay P D- 1 dp P dy 4 CE P (b) Suppose a bond

D = w, . -=-DX P -Dx (40+ AP = -D* Ay P D- 1 dp P dy 4 CE P (b) Suppose a bond with a face value of 100 and maturity of 2 years has coupons of 4 percent paid semi-annually while interest rates are flat at 5%. Using the formulas derived in step (a.) above, calculate the bond price change if interest rates move by 50 basis points. Answers: 1

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