Question: Type or paste question here 2. Suppose a 5% coupon, 5 year bond is selling for $ 1020. The coupon is paid every six months.

Type or paste question here 2. Suppose a 5% coupon, 5 year Type or paste question here

2. Suppose a 5% coupon, 5 year bond is selling for $ 1020. The coupon is paid every six months. Answer the following questions. (a) Calculate the yield to maturity of this bond. (7 marks) (b) Calculate the price of this bond if the yield to maturity increases by 2% with maturity unchanged. (7 marks). (c) Calculate the price of this bond if the yield to maturity decreases by 2% with maturity unchanged. (6 marks). Total: 20 marks

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