Suppose a bonds price is expected to increase by 5% if its market discount rate decreases by 100 basis points. If the bonds market discount rate increases by 100 basis points, the bond price is most likely to change by:

Group of answer choices

[A] 5%

[B] less than 5%

[C] more than 5%

[D] can not be determined

Consider the following two Treasury securities: Bond A is sold at $120 with 5 years of modified duration, and Bond B is sold at $80 with 7 years of modified duration. Which bond will have the greater dollar price difference for a 50-basis-point change in interest rates?

Group of answer choices

[A] Bond A

[B] Bond B

[C] Both bonds will have the same price

[D] Cannot be determined

When other factors are constant, the interest-rate risk of a coupon bond is lower when the bonds:

Group of answer choices

[A] Term to maturity is longer.

[B] Coupon rate is lower.

[C] Yield to maturity is higher.

[D] Market interest rate is higher.

[E] None of the above.