1. The cost of debt for Klutz Co. is 10%. They have two outstanding bond issuances; Bond A is semi-annual that matures 25 years and currently priced at $1000 and has a face value is $1000. Bond B is an annual bond with a coupon rate of 5% greater than Bond A, and a face value of $1000. It is currently selling at $14735.
   1. Calculate the modified duration and convexity of both bonds and explain which has more interest risk. (Once you know the maturity of bond B, manually round it to the nearest year and type it in to the appropriate part of the convexity and duration formulas and/or functions).
   2. Now increase the YTM for both bonds by 1% and calculate the percentage change in the price of both bonds.