Question: Question 2 1 pts Bond Features Maturity (years) 9 Face Value = $1,000 Starting Interest Rate 4.07% Coupon Rate = 5% Coupon dates (Annual) If

Question 2 1 pts Bond Features Maturity (years) 9 Face Value

Question 2 1 pts Bond Features Maturity (years) 9 Face Value = $1,000 Starting Interest Rate 4.07% Coupon Rate = 5% Coupon dates (Annual) If interest rates change from 4.07% to 5.59% immediately after you buy the bond today (and stay at the new interest rate), what is the price effect in year 4 ? State your answer to the nearest penny (e.g., 48.45) If there is a loss, state your answer with a negative sign (e.g., -52.30) Question 3 1 pts Assume you buy a bond with the following features Bond maturity = 4 Coupon Rate = 4% Face Value = $1,000 Annual Coupons When you buy the bond the market interest rate = 4.37% Immediately after you buy the bond the interest rate changes to 5.45% What is the "reinvestment" effect in year 3

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