Question $1$

If $10-$year interest rates are at $3\%...$and its volatility is at $100$ bps$...$how many standard

deviations away from a yield of $1\%$ are you? If you increase volatility to $200$ bps does it become

more or less likely to reach $1\%?$

Does this change in volatility make the bond more or less risky? Explain why.If $10-$year interest rates are at $3\%...$and its volatility is at $100$ bps$...$how many standard deviations away from a yield of $1\%$ are you? If you increase volatility to $200$ bps does it become more or less likely to reach $1\%?$

Does this change in volatility make the bond more or less risky? Explain why.