Show all your work. Circle your answer choice. If you solve the problem with a financial calculator list your N, I/YR, PMT, PV, and FV inputs.

Bond 1 is a 5-year annual bond with a face value of $1,000, a coupon rate of 8%, and a yield to maturity of 7%. Bond 2 is a 20-year zero-coupon bond with a face value of $1,000 and an annually compounded yield to maturity of 4%. 1. What is the price of Bond 1? 2. What is the price value of a basis point of Bond 1? 3. What is the modified duration (MD) of Bond 1?

PLEASE SHOW THE STEPS, DO NOT USE EXCEL.