1. If the interest rate rises, will the actual price of Bond B be higher or lower than the estimated price based on duration approximation? ONLY brief verbal explanation is required. (2 marks)

2. Assume Bond C and Bond D are identical except for their bond ratings. Without any calculation, determine which bond should you purchase (Bond C or Bond D) now if you expect the interest rate to go down in the coming period. Explain briefly (3 marks)

The following table contains information of several corporate bonds