Which of the following are true? 1. Bond prices and yields are inversely rehted. A 1 and 2 only ii. Cash flows further into the future are more sensitive to changes in interest rates. B I and 3 only iii. Modified duration is a measure of price sensitivity. C 2 and 3 only D 1,2 and 3 E The correct answer is not givea by (. Regarding Modified duration, which of the following are true? 1. It is the first derivative of price divided by price. A 1 and 2 only 2. It is the percentage increase in price resulting from a 100 basis point increase in yield. B I and 3 onty 3. For bond, it is not a function of par valne. 2 and 3 only 1.2 and 3 E The correct answer is not given by (A),(B)