Question 3. (30%) Consider a zero-coupon, 5-year maturity bond where coupons are paid annually and time zero market yield level is 8 percent.

1. (8%) Find the possible prices of this bond at the following market yield levels and calculate the (actual) percentage price () change relative to the price () at 8 percent yield level. In other words fill in the following table.

Yield (%)	Price ($) levels for the zero-coupon, 5-year bond
5
6
7
7.5	1,000
8
8.5
9
10
11

2. (7%) Plot the price-yield graph of this bond, utilizing information obtained in part a.

(Attach the graph with a title Question 3 Part b)

3. (8%) Calculate the duration of this bond at the following yield levels. (In other words fill in the following table).

Yield (%)	Duration
5
6
7
8
9
10
11

4. (7%) Compare and contrast (question 1, part c) and (question 3, part c) and interpret the results.