Bond A has a 6% coupon, paid semi-annually and is due in 2 years. Its value is currently $ 900.

Bond B has a 10% coupon, paid semi-annually and is due in 4 years. It is priced to yield 12%.

Bond C is a zero-coupon bond priced to yield 11% in 8 years.

9. Assuming that the duration of Bond A is 1.94 years, which of the following statements about the effect of a 1% decline in interest rates is true? A. Bond C, having a longer duration than Bond A, would have a larger percentage increase in price than Bond A. B. The percent change in a price of a bond is independent of the duration of a bond. C. It is not possible to determine the percent change in price of Bond A versus Bond C because the duration of Bond C is not given. D. Bond A would have a greater percent change in price vs. Bond C because it has a shorter duration. E. The percent change in the price of Bond A and C is equal since it is not affected by duration. Make your selection