9. Duration is an important measure of interest rate risk. The duration is the percent the price of a bond changes for each percent change in the yield to maturity. For example, a bond with a price of...

Extracted text: 9. Duration is an important measure of interest rate risk. The duration is the percent the price of a bond changes for each percent change in the yield to maturity. For example, a bond with a price of $900 has a duration of 4 will have a price change of $36 for every 1% change in the bond yield to maturity (1% x 4 4%, then take 4% x $900 $36.) If the rate change is up, the bond price goes down -$36. Ifthe rate moves down, the price of the bond goes up $36. Assume the same $900 bond has an interest rate change from 7% to 5%, what would be the new price of the bond? Assume another bond is priced at $1,100 has an interest rate change from 7% to 10%, what would be the new price of the bond?