Question: Problem 1: A bond has a 7.5% annual coupon rate with 4 years to maturity and pays annual coupon 1.1 What is the price of

Problem 1: A bond has a 7.5% annual coupon rate with 4 years to maturity and pays annual coupon 1.1 What is the price of the bond if the yield to maturity is 5% 1.2 What is price of the bond if the yield to maturity increases by 0.2%? 1.3 What is the % change in the price of the bond when yield increases by 0.2%? I 1.4 What is the bond duration? 1.4 What is the modified duration? 1.5 Using the modified duration, what is the percentage change in the price if the yield increases by 0.2% 1.6 What can you conclude regarding the error-estimate based on the modified duration

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