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

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4) A four-year 12% coupon bond has a par value of $1,000 and YTM of 9%.Using duration, what is theestimate new price of the bond if interest rates suddenly rise by 1%?*A) $1,062.66B) $1,059.31
C) $1,066.07D) $1,063.41E) $1,064.125) A four-year 8% coupon bond has a par value of $1,000 and YTM of 12%.What is the percent error ofestimating 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 ofthis bond?
7) Maryland Bankcorp has the following balance sheet.What is the impact on net interest income onthis bank in 1, 2, and 3 years if interest rates increase by 1%?AssetsmillionsLiabilitiesmillionsCash$50Non-interest-bearingdemand accounts$2001-Year Treasury Notes$100Savings accounts(interest determinedweekly)$3003-Year Fixed Rate Loans$6006-month certificates ofdeposit (CDs)$400Credit Cards (interest rates adjustsemiannually)$3002-year certificates ofdeposit (CDs)$50Total Assets$1,050Total Liabilities$950

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Term
Fall
Professor
NoProfessor
Tags
Balance Sheet, Bond duration

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