1. An analyst accurately calculates that the price of an ordinary, noncallable bond with a 9% coupon would experience a 12% change if market yields increase 100 basis points. If the market yields decrease 100 basis points, the bond's price would most likely:

(Select the best answer below.)

A. increase by less than 12%.

B. increase by 12%.

C. increase by more than 12%.

2. A $1,000 par value bond has a current price of $799.30 and a maturity value of $1,000 and matures in 6 years. If interest is paid semiannually and the bond is priced to yield 8%, what is the bond's annual coupon rate? The bond's annual coupon rate is?