1. On Aug. 22, 2017 Amazon.com issued a semiannual bond with coupon rate of 3.15% and maturity date of Aug. 22, 2027. The bond pays coupon on Feb. 22 and Aug. 22 every year. The current bond YTM is 0.96%.

1. Please find bond duration (in years), modified duration (in years) and convexity (in years) on Aug. 22, 2020 right after the coupon is paid. (9 points)
2. Assuming on Aug. 22, 2020, the yield to maturity decreases by 0.25%, based on the duration, how much should the bond price change? Based on both duration and convexity, how much should the bond price change? What is the actual price change? (6 points)
3. Following question b, if the yield to maturity decreases by another 0.25%, will the actual price change the same amount as in question b, more than the amount in question b or less than the amount in question b? Please explain without calculating the actual bond price. (3 points)