The current price of a corporate bond issued by TV is $1,030 with annual coupon payments. The YTM on TV's bond is 8%. Using the duration model, you estimate that when the YTM increases to 8.1%, the price of the bond will go down to $1,020. What is the duration of TV's bond?

A. 9.5 years

B. 8.5 years

c. 10.5 years

d. 7.5 years

You purchase a 5-year corporate bond. The coupon rate of the bond is 8%; paid semi-annually, and its par value is $1,000. The YTM is 6%. If you sell the bond one year later when the interest rate declines to 5%, what is your holding period return?

a. 2.1%

b. 1.7%

c. 9.4%

d. 6.5%