Calculate the approximate duration

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Could you please help me with the following questions? Thank you so much.

Background information:

Maturity:  8 years semi

Coupon:  9%

YTM: 4%

Reinvestment Rate:  2.5%

a) If you buy 1,000 bonds, excluding accrued interest expense, what is the total cost?

b) If you are going to fund a $100 million liability with this bond, how many bonds are needed?  What is the cost of the portfolio?

c) If the Rf rises by 75 bps, provide the new price of the bond and % change based on duration only 

d) Calculate the approximate duration

Reference no: EM133121847

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