After taking the investment course, Jane finds a new interest in fixed income securities. She starts actively looking for bargains in the bond market. One day she spots the following bond. It is an annual coupon bond with 3 year to maturity. The coupon rate is 10%; the par value is $1,000; and the yield to maturity is 8%. What price would she pay if she buys the bond? What are the duration and the modified duration of the bond? How much return will she get if the yield increases 10bp right after she makes the purchase? It so happened in the market that there is another bond (with longer maturity, lower coupon and same yield) priced exactly at the same price as the 3-year issue. If Jane believes the market interest rate is going to drop very soon, which bond should she purchase