PLEASE ANSWER QUESTIONS 1 AND 2 1 Consider a 10 year bond which pays 6 coupon semi annually and has a yield to maturity of 7 How much would the price of bond change if investors required return increases to 8 per year a increase by approximately $125 b increase by approximately $54 c decrease by approximately $65 d decrease by approximately $52 2 Consider a 10 year bond with face value $1,000, pays 6 coupon semi annually and has a yield to maturity of 7 How much would the price of bond change if interest rate in the economy increases by 0 80 per year a increase by approximately $101 b decrease by approximately $52 c increase by approximately $60 d decrease by approximately $101

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Question: PLEASE ANSWER QUESTIONS 1 AND 2 1. Consider a 10 year bond which pays 6% coupon semi-annually and has a yield-to-maturity of 7%. How much

PLEASE ANSWER QUESTIONS 1 AND 2

1. Consider a 10 year bond which pays 6% coupon semi-annually and has a yield-to-maturity of 7%. How much would the price of bond change if investors required return increases to 8% per year?

a.		increase by approximately $125
b.		increase by approximately $54
c.		decrease by approximately $65
d.		decrease by approximately $52

2. Consider a 10 year bond with face value $1,000, pays 6% coupon semi-annually and has a yield-to-maturity of 7%. How much would the price of bond change if interest rate in the economy increases by 0.80% per year?

a.		increase by approximately $101
b.		decrease by approximately $52
c.		increase by approximately $60
d.		decrease by approximately $101

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