(a) For the 1-year bond, the value of a $100 bond changes from $100/1.0800 ≈ $92.59259 to $100/1.0801 ≈

$92.58402. This is about a –0.009% change.

(b) For the 10-year bond, the value of a $100 bond changes from $100/1.0810 ≈ $46.31935 to $100/

1.080110 ≈ $46.27648. This is a –0.09% change—ten times that of the 1-year bond.

(c) The derivative of the 1-year bond is −0.009/0.01 ≈ −1. The derivative of the 10-year bond is −0.09/0.01≈ −9. The derivative of the 10-year bond is nine times more negative.