Which of the following statements is CORRECT?

a.You hold two bonds, a 10-year, zero coupon, issue and a 10-year bond that pays a 6% annual coupon.If the interest rate rises from its current level, the zero coupon bond will experience the larger percentage decline.

b.The time to maturity does not affect the change in the value of a bond in response to a given change in interest rates.

c.You hold two bonds.One is a 10-year, zero coupon, bond and the other is a 10-year bond that pays a 6% annual coupon.The same interest rate, 6%, applies to both bonds.If the interest rate rises from the current level, the zero coupon bond will experience the smaller percentage decline.

d.The shorter the time to maturity, the greater the change in the value of a bond in response to a given change in interest rates, other things held constant.

2.A 10-year bond that pays coupon semi-annually at a coupon rate of 9% is priced at $ 900 at its issuance. What is the Yield to Maturity of the Bond?(7 points) If it is called back 3-years after the issuance will a call premium of 5%. What is its Yield to Call? (3 points)