Question: Under a flat interest rate term structure, a 4-year bond with face value $1,000 and annual coupon rate of 4% (paid at the end of

Under a flat interest rate term structure, a 4-year bond with face value $1,000 and annual coupon rate of 4% (paid at the end of each year) is currently priced at par. Use the 1st order modified approximation to estimate the bond price when the yield curve experiences a parallel shift up by 0.5% (i.e. from i to i+0.5%). swer 981.85 982.06 1018.88 ered 1018.15 981.12

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