Duration is a very important concept that allows investors to better understand the risk of owning a particular bond. For example, we are interested in buying a three-year bond with a $1,000 face value, a 3% coupon and a 4% yield-to-maturity. What is the duration of this bond? Multiple Choice 2.82 2.91 2.83 2.81 Continue with the same bond as in the previous question (#28). The bond has a $1,000 face value, a 3% coupon and a 4% yield-to-maturity. How long should you hold the bond if you want to be assured of earning the 4% yield to maturity that you thought you were going to earn? Multiple Choice 2.82 years 2.91 years 2.84 years 2.83 years Continue with the same bond as in the previous two questions (#28 & #29). The bond has a $1,000 face value, a 3% coupon and a 4% yield-to- maturity. If market yields were to rise by 40 basis points, what dollar change in price would you expect, calculated using modified duration? Multiple Choice $12.98 - $10.88 + $9.94 + $15.54