1. Use www.wsj.com to answer the following questions:

a. Find a long-term Treasury bond with a low coupon and calculate its duration. Now find another bond with a similar maturity and a higher coupon. Which has the longer duration?

b. Look up the yields on 10-year nominal Treasury bonds and on TIPS. If you are confident that inflation will average 2% a year, which bond will provide the higher real return?