Question: Use this data to answer questions . (assume that each bond pays interest semiannually): Bond A Bond B Coupon 6% 7% Yield to maturity 6%

Use this data to answer questions. (assume that each bond pays interest semiannually):

Bond A Bond B
Coupon 6% 7%
Yield to maturity 6% 6%
Maturity (years) 2 5
Par $100.00 $100.00
Price $100.00

$104.265

Using modified duration, calculate % change in price of the two bonds if the yield goes down by 10 basis point.

A) 0.252, 0.448

B) 0.186, 0.421

C) 0.336, 0.665

D) 0.256, 0.566

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