Consider the following two bonds (assume annual coupons) Coupon YTM (years) Bond A 9% 1 0% Bond B 10% 1 0% Time to maturity (years) Par Price $1000 $982.595 $1000 $1000 a) Calculate the actual price of the bonds for a 100 basis point (ie. 1%) increase in b) Using modified duration, estimate the price of the bonds for a 100 basis point c) Would the same change of interest rates but in the opposite direction produce interest rates increase in interest rates. the same magnitude of change in bond prices? Comment! (No calculations are required) d) For a bond investor interested in price appreciation, which bond would you recommend? Why