We have a bond with a coupon rate of 12% paid annually, 3 years to maturity, a par value of $1,000, and the yield to maturity of 1$0%.

1. Figure out the duration of the bond.

2. You believe that the Fed is about to increase interest rates by 60 basis points (0.6%). Figure out the percentage change in the bond price using the duration. (If you cannot figure out the duration above, please use a duration of 3.)