15. Assume you own a 2-year US

Treasury Note with a 5% coupon and

a 7-year US Treasury Note with a 0%

coupon. If market interest rates

decrease by 100 basis points in the

2-year maturity and declined by only

75 basis points in the 7-year

maturity, which bond would

experience the smallest market value

change?

a. 5% US Treasury due in 2 years

b. 0% US Treasury due in 7 years

c. Both would change by the same

amount

d. Prices would not change since the

coupons are fixed