Janet Meer is a fixed$-$income portfolio manager. Noting that the current shape of the yield curve is flat, she considers the purchase of a

newly issued, $7\%$ coupon, $10-$year maturity, option$-$free corporate bond priced at par. The bond has the following features:

Change in Yields

a$.$ Calculate the modified duration of the bond.

b$.$ Meer is also considering the purchase of a newly issued, $7\mathrm{.}25\%$ coupon, $12-$year maturity option$-$free corporate bond. She wants to

evaluate this second bond's price sensitivity to an instantaneous, downward parallel shift in the yield curve of $200$ basis points.

Based on the following data, what will be its price change in this yield$-$curve scenario?

Original issue price

Par value, to yield $7\mathrm{.}25\%$

Modified duration $($at original price$)$

Convexity measure

Convexity adjustment $($yield change