7. A bund s coupon rate Equal its annual coupon payment divided by the bonds' current market price a. Varies during the life of the bond b. Equals its annual coupon payment divided by the interest rate c. Equals its annual coupon payment divided by its par value d. Both 1 and 2 are correct 8. Indicate whcther the follow ing statements are true or faloc. a. Ionger-maturity bonds necessarily have longer durations. f. The longer a bond's duration, the lower its volatility. (Volatility = modificed duration. 1 6. Other things equal. the lower the bond coupon. the higher its volatility. d. If interest rates rice. bond durations rise also. price of the bond: a. changes by 5.2 perecnt. h. changes hy 2.6 percent. . changes by 7.8 percent. d. will not change