Consider a coupon bond with a 3% interest rate and a $1000 face value. The bond will mature in 2 years. We know the coupon rate is larger than or equal to 1% but smaller than or equal to 3%. However, we do not know the exact the coupon rate. Duration is defined as a weighted average of the maturities of the cash payments. Suppose the weight assigned to maturity of 1 year is W and the weight assigned to the maturity of 2 years is V. Assume that the coupon rate can be changed. Which is correct?

		If the coupon rate decreases to 0.1%, then W and V both increase, resulting in an increase in the duration.
		If the coupon rate decreases to 0.5%, then W decreases but V increases, resulting in an increase in the duration.
		If the coupon rate increases to 4%, then W decreases but V increases, resulting in a decrease in the duration.
		If the coupon rate increases to 5%, then W and V both decrease, resulting in a decrease in the duration.
		None of the above.