Value: 100 Points Due Date: Complete by end of Day 7 Thisquiz is similar to other assignments you have completed. There are four questions requiring analysis and explanation that relate to bond valuation. If you do your analysis on a financial calculator, provide all inputs you employ to reach a result. If you use Excel, cut and paste your analysis into the response boxes. There is no time limit on this quiz and you may save it and return to complete it later. You can only submit it once.

The coupon rate and market price for the 10-year US Treasury bond are 2.50% and 96.3828 respectively. Note, the price is expressed as a percentage of par (like other bonds). If par is $1000, then this bond is selling for $963.828.

This assignment is due no later than 11:59 p.m. ET on Day 7.

Not allowed. This test can only be taken once.

This test can be saved and resumed later.

Question Completion Status:QUESTION 1

1. Assume that this bond will mature in precisely 10 years, pay coupons semi-annually, and has a par value of $1000. Determine the yield to maturity for this bond.

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25 points

QUESTION 2

1. Compute the duration of this bond and use it to estimate the new value of the bond if rates were to suddenly decline by 0.80%.

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25 points

QUESTION 3

1. Calculate the bond's value directly (using the present value approach) assuming that rates declined 0.80% from the yield to maturity you estimated in the first question.

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25 points

QUESTION 4

1. Compare your answers to Questions 2 and 3. Explain the source of any difference. Which is more correct

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