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Consider the following two bonds: A 10-year zero-coupon bond with Macaulay duration 10 and yield to maturity 4% A 5-year, 8% coupon bond with Macaulay

Consider the following two bonds:

A 10-year zero-coupon bond with Macaulay duration 10 and yield to maturity 4%

A 5-year, 8% coupon bond with Macaulay duration 4.3 and yield to maturity 7%

a. Find the modified duration of each bond.

b. If market interest rates rise by 0.75%, find the percent change in the price of each bond. Express your answers as percentages rounded to two decimal places

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