The current yield curve is t=1 2 1.00% 1.20% 3 1.40% 4 5 6 1.60% 1.80%...

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The current yield curve is t=1 2 1.00% 1.20% 3 1.40% 4 5 6 1.60% 1.80% 2.00% 7 8 2.20% 2.40% 9 2.60% Consider a standard bond with a coupon rate of 2% (assuming annual payments) and a face value of $100. 2.1: What is the YTM of the bond? 2.2: What is the duration of the bond? What is the new price of the bond using exact calculation? What is the new price predicted by the duration formula? What is the new duration of the bond (after the rate increase)? 10 2.80% Suppose all rates increase by 20 basis points (eg., the one year moves from 1.00% to 1.2%, the two year from 1.2 to 1.4, etc.). The current yield curve is t=1 2 1.00% 1.20% 3 1.40% 4 5 6 1.60% 1.80% 2.00% 7 8 2.20% 2.40% 9 2.60% Consider a standard bond with a coupon rate of 2% (assuming annual payments) and a face value of $100. 2.1: What is the YTM of the bond? 2.2: What is the duration of the bond? What is the new price of the bond using exact calculation? What is the new price predicted by the duration formula? What is the new duration of the bond (after the rate increase)? 10 2.80% Suppose all rates increase by 20 basis points (eg., the one year moves from 1.00% to 1.2%, the two year from 1.2 to 1.4, etc.).