Please show work, no pictures please. Use 30/360 for count days.

1) You purchase an Australian Commonwealth Government Bond (CGB) that settles on Tuesday 15 June 2010. The CGB has a YTM of 7.8%, pays semi-annual coupons at a rate of 7% pa. and matures on 15 July 2011, what is the settlement price of the bond?

2. You purchase an 8% July 2013 CGB with a YTM of 8.6% that settles on 15 July 2010. You sell the bond when it is yielding 9.4%. The sale settles on 15 July 2012, If u can reinvest the coupon payments at 6% p.a what is your holding period return? What are the three components of this return?

3 ) What is the duration of a 3-year 12% CGB yielding 9%. What is its modified duration?

4) What is the settlement price of an August 2014 CGB with a coupon of 5.6% and a YTM of 4.8% if the transaction settles on July 16 2010? What is the quoted price?

5. What is the Macaulay duration of the above bond?

6 What is the modified duration of the bond?

7) What is the approximate price change if interest rates increase by 50 basis points using a duration approximation?

8)What is the holding period return if you purchase this bond on July 16 2010, sell it on December 15 2011 when its YTM is 6.4% and you reinvest your coupons at 5% pa. compounded monthly?