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How much would the bond price change

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XYZ bank recently purchased at par a $1,000,000 issue of United States Treasury bonds. The bonds have duration of 3 years and pay 6% annual interest.

Question 1: How much would the bond's price change if interest rates were to fall from 6% to 5%?

Question 2: How much would the bond's price change if interest rates were to rise from 6% to 7%?

Question 3: What would your answer be if the duration of the bond was 6 years?

Reference no: EM132615184

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