pls i need help with this exams paper its a maters class you have to show all working step by step

MBA 641 Fixed Income Securities Exam 1 Chapters 1, 2, 3, 4 Directions: Answer the following questions and submit your answers to the Dropbox by midnight Sunday CT. Numerical Problems: you are required to show steps/formulas/solutions to obtain credit. That is, I need to be able to follow how you get the answer. 1. A $1000 par value bond with 5 years to maturity and a 6% coupon has a yield to maturity of 8%. Interest is paid semiannually. (Each is worth 5 points, 25 points total). a) b) c) d) Calculate the current price of the bond. Calculate the Macaulay duration for the bond. Please interpret your answer. Calculate the modified duration for the bond. Estimate the percentage price change for this 5-year $1,000 par value bond, with a 6% coupon, if the yield rises from 8% to 8.5%. Interest is paid semiannually. e) Calculate the convexity measure. 2. A corporate bond matures in 14 years. The bond has an 8 percent semiannual coupon and a par value of $1,000. The bond is callable in five years at a call price of $1,050. The price of the bond today is $1,075. What are the bond's yield to maturity and yield to call? ( 10 points) 3. An investor is considering the purchase of a 10-year 8% coupon bond selling for $934.96 and a par value of $1,000. The yield to maturity for this bond is 9%. Calculate the interest on interest from the bond assuming that the semiannual coupon payments can be reinvested at 4.5% every six months ( 5 points) 4. Consider the following portfolio: (Each is worth 5 points, 10 points total). Sector Treasury Agency Mortgages Agency MBS Asset-Backed Securities Market Value $10 million $20 million $35 million $12 million $23 million Duration (years) 2.01 6.35 3.12 5.12 3.44 a) What is the contribution to portfolio duration for each bond? b) What is the portfolio's duration? 1