Steel Pier Company has issued bonds that pay semi annually with the following characteristics:
CP rate: 10%
YTM: 10%
Maturity: 10 years
Maca Duration: 6.76 years
The modified duration for the Steel Pier bond is ______.
A. 6.15 years
B. 5.95 years
C. 6.49 years
D. 9.09 years
Answer: A
If the yield to maturity decreases to 8.045%, the expected percentage change in the price of the bond using modified duration would be ____.
A. 11%
B. 13%
C. 12%
D. 10%
Answer: C