1. A bond has 1 year to maturity, 6% coupon, 8% yield and pays semiannually. The price of the bond is $981.139. If yield increases by 25 basis points, calculate the new bond price using the duration model.
978.82
976.51
983.46
985.77
None of the above
2. Matt Miller, age 28, takes out $50,000 of straight-life insurance. His annual premium is $418.20. At the end of 20 years, the cash value of his policy is (use the tables in the handbook):
$13,250
None of these
$30,000
$26,000
$26,500