A four year 12 coupon bond has a par value of 1000

4) A four-year 12% coupon bond has a par value of $1,000 and YTM of 9%. Using duration, what is the
estimate new price of the bond if interest rates suddenly rise by 1%?
*A) $1,062.66
B) $1,059.31

C) $1,066.07
D) $1,063.41
E) $1,064.12
5) A four-year 8% coupon bond has a par value of $1,000 and YTM of 12%. What is the percent error of
estimating the new price if interest rates jump by 1.25%?
6) The modified duration of a zero coupon bond that matures in 30 years is 26.087. What is the YTM of
this bond?
7) Maryland Bankcorp has the following balance sheet. What is the impact on net interest income on
this bank in 1, 2, and 3 years if interest rates increase by 1%?
Assets millions Liabilities million
s
Cash $50 Non-interest-bearing
demand accounts
$200
1-Year Treasury Notes $100 Savings accounts
(interest determined
weekly)
$300
3-Year Fixed Rate Loans $600 6-month certificates of
deposit (CDs)
$400
Credit Cards (interest rates adjust
semiannually)
$300 2-year certificates of
deposit (CDs)
$50
Total Assets $1,050 Total Liabilities $950