A 16-year U.S. Treasury bond with a face value of $1,000 pays a coupon of 5.75%. Coupon is to be paid semi-annually. The reported annual yield to maturity is 5.4%. Solve the following questions:
a) What is the present value of the bond?
b) What is the duration of the bond?
c) If the yield to maturity changes to 1%, what will be the present value?
d) If the yield to maturity changes to 8%, what will be the present value?
e) If the yield to maturity changes to 15%, what will be the present value?
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