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4. A bond has a duration of 7. If the yield of maturity of the bond increases by 1%, the bond price will change by:

4. A bond has a duration of 7. If the yield of maturity of the bond increases by 1%, the bond price will change by: A. + 7% B.-7% C. + 1% D. -1% E. None of the above I 5. Which set of conditions will result in a bond with the highest interest rate risk? A. A low coupon with short maturity B. A low coupon with long maturity C. A high coupon with short maturity D. A high coupon with long maturity 3

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