1) Consider an 11-year zero-coupon bond with a face value of 200. The 11-year spot rate is 3.5% p.a. nominal. Assume that Macaulay Duration and Modified Duration are expressed as positive numbers. Assuming semi-annual compounding and based on the concept of duration, which statement below is incorrect?

The bond's modified duration is 10.81 years.

The bond has a price of $136.54

The bond will decrease in value by 5.41% if the yield curve shifts upwards by 50 basis points at all maturities.

The bond will increase in value by 738.08 cents if the yield curve shifts downwards by 100 basis points at all maturities.

The bond has a Macaulay duration of 11 years.

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2) A 6% coupon bond paying interest semi-annually has a modified duration of 11 years, sells for $620, and is priced at a yield to maturity (YTM) of 8.60%. If the YTM increases to 9.35%, the price, using the concept of duration, is predicted to:

Group of answer choices

decrease by $53.35

decrease by $48.87

decrease by $51.15

decrease by $47.10

decrease by $49.04