Consider a bond with two year remaining to maturity, a $1,000 face value, an 8 percent coupon rate (paid annually),

and an interest rate (either required rate of return or yield to maturity) of 10 percent.

How much is the modified Duration of the bond in years?

		1.55
		1.65
		1.75
		1.85
		1.95
		2
		2.01
		2.11
		3
		4

#2

Suppose reserves are $2 billion and the Fed increases reserves by 10% or $200 million when bank reserve requirements are 8%. What is the predicted increase in bank deposits?

in billion dollars.

		1.11
		1.25
		2
		2.22
		2.25
		2.50
		2.8
		6.2
		3.3
		4.56