A 30-year maturity bond making annual coupon payments with a coupon rate of 12% has duration of 11.54 years and convexity of 192.4. The bond currently sells at a yield to maturity of 8%.

1. Please find the price of the bond if its yield to maturity falls to 7% or rise to 9%.
2. What prices for the bond at these new yields would be predicted by the duration rule and the duration-with-convexity rule? What is the percent error for each rule? What do you conclude about the accuracy of the two rules?