1. You observe two U.S. Government bonds with the same coupon rates and coupon payment dates. Bond A has a 1-year maturity, and Bond B has a 10-year maturity. Suppose the market interest rates (YTMs) for both bonds increase by 1 percent. Bond A has a than bond B. (a) larger relative price increase (b) larger relative price decrease (c) smaller relative price increase (d) smaller relative price decrease

1. You observe two U.S. Government bonds with the same coupon rates and coupon payment dates. Bond A has at 1-ycar maturity, and Bond B has a 10-year maturity. Suppose the market interest rates (YTMs) for both bonds increase by 1 percent. Bond A has a than bond B. (a) larger relative price increase (b) larger relative price decrease (c) smaller relative price increase (d) smaller relative price decrease