p1given the following data german bondus t-

Question

P1	Given the following data:
		German Bond	U.S. T- Bonds
	Maturity	25	30
	Coupon Rate	4.88%	4.50%
	YTM	3.10%	2.80%
	Face Value	$             1,000.00	$              1,000.00
	Coupon payment	Annually	Semi-Annually
a	Compute the price of each bond.
b	Compute the duration and modified duration of each bond
c	Suppose the yield levels increase by 1%.  Calculate the relative price change for each bond.
	Estimate the relative price change for each bond using duration. Comment on the accuracy of the estimation.
P2	An investor buys a French government, 10-year bond, paying annual coupon of 4.5%. Face value = 1000.
	The investor is unsure of his investment horizon and considers 5 horizons: 5, 6, 7, 8, and 9 years.
	Suppose that immediately after the investor has bought the bond, the interest rate changes.
	Compute the investor's annual return for each of the 5 horizons for two scenarios: the yield increases by 1% and the yield decreases by 1%.
	Put differently, complete the following table:
		Annual Return
	Horizon (years)	YTM = 5.5%	YTM = 3.5%
	5
	6
	7
	8
	9
P3	Given the data for the following bonds
	Bond	Coupon	Maturity	YTM	Face Value
	1	0	1	4%	1000
	2	4.50%	2	6%	1000
	3	6%	2		1000
	Assume all bonds pay annual coupon.
a	Compute the price of the 3rd bond.
b	Calculate the YTM of the 3rd bond.