Let a newly issued two-year coupon bond have a par value of, Finance Basics

Let a newly issued two-year coupon bond have a par value of

Question: Let a newly issued two-year coupon bond have a par value of $100, a coupon rate of 7 percent ($7), and a yield y = 0.05 or 5 percent per year.

Compute the duration of this bond.

Suppose the yield increases by 25 basis points. Compute the actual bond price change.

What would be the bond's price change according to: Change in Price = -(Price) (Modified Duration) (change in YTM)

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Finance Basics: Let a newly issued two-year coupon bond have a par value of

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