1. A zero coupon bond with 4 years to maturity has an annualized yield to maturity of 4%. A 4-year maturity annual-pay coupon bond has as face value of $1000 and a 3% coupon rate. The coupon bond is also currently trading at a 4% yield. (a) Please calculate the duration of each bond. Which bond has the lower duration? Provide some intuition for this result. (b) Using the formula that approximates bond price change as a function of its dura- tion, please calculate the approximate price change of both bonds if yields increase from 4% to 5%