Bond A has 5 years to maturity, par value of $1,000, and currently sells for $1,200. Bond Z has 5 years to maturity, par value of $1,000, and currently sells for $800. As both bonds near the maturity date, the price of Bond A is expected to _________ and the price of Bond Z is expected to ___________.

• A. converge to $1,000; converge to $1,000
• B. stay at $1,200; stay at $800
• C. stay at $1,200; converge to $1,000
• D. converge to $1,000; stay at $800

A bond has a modified duration of 5. It is currently priced at par value of $1,000 and has 8 years until maturity and a 6% coupon rate. What is the expected percent change in the bond price if there is a one percent increase in the bond's YTM?

• A. A 5% increase in price
• B. An 8% increase in price
• C. A 5% decrease in price
• D. A 6% decrease in price