Question: Question 3 1 pts Bond Features Maturity (years) = 8 Face Value = $1,000 Starting Interest Rate 4.43% Coupon Rate = 4% Coupon dates (Annual)

Question 3 1 pts Bond Features Maturity (years) = 8 Face Value = $1,000 Starting Interest Rate 4.43% Coupon Rate = 4% Coupon

Question 3 1 pts Bond Features Maturity (years) = 8 Face Value = $1,000 Starting Interest Rate 4.43% Coupon Rate = 4% Coupon dates (Annual) If interest rates change from 4.43% to 6.71% immediately after you buy the bond today (and stay at the new interest rate), what is the price effect in year 2 ? 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 4 1 pts Assume you buy a bond with the following features Bond maturity = 4 Coupon Rate = 3% Face Value = $1,000 Annual Coupons When you buy the bond the market interest rate = 3.49% Immediately after you buy the bond the interest rate changes to 7.35% What is the "reinvestment" effect in year 3 ? Question 3 1 pts Bond Features Maturity (years) = 8 Face Value = $1,000 Starting Interest Rate 4.43% Coupon Rate = 4% Coupon dates (Annual) If interest rates change from 4.43% to 6.71% immediately after you buy the bond today (and stay at the new interest rate), what is the price effect in year 2 ? 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 4 1 pts Assume you buy a bond with the following features Bond maturity = 4 Coupon Rate = 3% Face Value = $1,000 Annual Coupons When you buy the bond the market interest rate = 3.49% Immediately after you buy the bond the interest rate changes to 7.35% What is the "reinvestment" effect in year 3

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