GHI Corp has a 8% coupon bond making annual payments that matures in 4 years.
a) Find the duration of the bond if it has a yield to maturity of 10%.
b) Using the modified duration relationship, find the price of the bond if the yield goes up by 50bps.
c) Compared to a 12% coupon bond that has a maturity of 4 years, which bond would be most affected by a rate change? Explain without using calculations.