1) The duration of a bond normally increases with an increase in:

I. Term to maturity

II. Yield to maturity

III. Coupon rate

a) I, II, and III

b) II and III only

c) I and II only

d) I only

2) Steel Pier Company has issued bonds that pay semiannually with the following characteristics:

Coupon	Yield to Maturity	Maturity	Macaulay Duration
10%	10%	10 years	6.76 years

a) The answer cannot be determined from the information given.

b) unchanged

c) larger

d) smaller

If the maturity of the bond was less than 10 years, the modified duration would be _____ compared to the original modified duration.