Question: Need help with 26 please 25. Modified Duration An annual payment bond has a duration of 3 years and a yield rate of 4.5%. This

Need help with 26 please Need help with 26 please 25. Modified Duration An annual payment

25. Modified Duration An annual payment bond has a duration of 3 years and a yield rate of 4.5%. This bond has a modified duration of years. a. 2.94 3.00 c. 2.87 d. 3.57 26. Interest Rate Risk Interest rate risk is composed of price risk and reinvestment risk. If interest rates increase the investor's bond sale price is income is . If interest rates increase the investor's reinvestment If an investor picks a bond with duration the investment horizon the two risks are exactly offsetting a. decreased; increased; equal to b. increased; decreased; greater than c. increased; decreased; equal to d. decreased; increased; less than 27. You predict that interest rates are about to fall. Which bond will give you the highest capital gain? Price. face a. Low coupon, long maturity b. High coupon, short maturity. High coupon, long maturity d Zero coupon, long maturity oprice of bond and

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