A bond is selling in the market for $1,100 and has a duration of 4.5 years. Market interest rates are 5 percent and are expected to increase to 7 percent in the near future. What will this bond's price be after the change in market interest rates?

A. $1,00 6

B. $1,19 4

C. $1,12 2

D. $1,07 8

E. $1,10 0 12.

The number of futures contracts that a bank will need in order to fully hedge its overall interest rate risk exposure and protect the net worth depends upon (among other factors):

A. the relative duration of bank assets and liabilities.

B. the duration of the underlying security named in the futures contract.

C. the price of the futures contract.

D. All of the options are correct

E. None of the options are correct