What is the total cost

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Reference no: EM133121275

Could you please help me with the following questions?

Par value is $1000

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 Risk-free rate rises by 75 bps, provide the new price of the bond and % change based on duration only 

Reference no: EM133121275

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