A 10-year, 10 percent annual coupon. S1.000 bond ades at a yield to maturity of & percent The bond has a duratie of94 years Questiee I mutiple Choice quetions I) What is the modified duration of this bond A65967 R 6479 C 7452 D. 5.418 Modified duration -Duration(+ R-69941.08-6.4759 2) Suppose that debt-equity rtie (DEand the sales-asset ratie (S/A) were two factors influencing the past defalt behavior of bemowers Based on past default (repayment) experience, the linear probablity model is estimated as: PDI -0.S(DE) +0.(S/A Ifa prospective borower has a debt-equity ratio of 0.4 and sales-asset ratio of LR, the expected probability of default is 0.02 b. 0.35. 0.38. 0.62. d. 3) Can modified duration provide an accurate measunre of the change in price of bond that results from a change in interest rate? A. Yes, if the change in interest rate is small B. Yes, if the change in interest rate is large C. No, because modified duration is not related to price semsitivity from interest rate changes D. None of the answers are correct