You are creating a portfolio that consists of the following two bonds. Bond A pays an annual 7% coupon, matures in two years, has a yield to maturity of 8%, and a face value of $1,000. Bond B pays an annual 8% coupon, matures in three years, has a yield to maturity of 9%, and a face value of $1,000. Macaulay Duration is 1.93 years for Bond A and 2.78 years for bond B.

1.) Calculate the price of Bond A.

a. $975.62 b. $982.17 c. $990.57 d. $1,009.50 e. $1,018.08

2.) Calculate the price of Bond B.

a. $974.69 b. $990.64 c. $995.22 d. $1,013.88 e. $1,025.77

3.)Calculate the Modified Duration for Bond A.

a. 0.98 b. 1.79 c. 1.90 d. 1.93 e. 2.31

4.) Calculate the Modified Duration for Bond B.

a. 1.44 b. 2.47 c. 2.55 d. 2.70 e. 2.78