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Use Figure 18 2 and the modified duration for the securities

Use Figure 18-2 and the modified duration for the securities given to answer the following questions.

a. Compute the expected change in price for the 30-year Treasury if interest rates go up by 75 basis points. Assuming the bond is selling for $1,000, what would the dollar change be?

b. Compute the expected change in price for the 30-year Treasury if interest rates go down by 20 basis points.

c. Compute the expected change in price for the 10-year Treasury if interest rates go up 0.75 percent.

d. If you think rates will rise, which bond would you rather own?

a. Compute the expected change in price for the 30-year Treasury if interest rates go up by 75 basis points. Assuming the bond is selling for $1,000, what would the dollar change be?

b. Compute the expected change in price for the 30-year Treasury if interest rates go down by 20 basis points.

c. Compute the expected change in price for the 10-year Treasury if interest rates go up 0.75 percent.

d. If you think rates will rise, which bond would you rather own?

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