$1\mathrm{.}1$ OMB bond offers a coupon rate of $3\mathrm{.}5\%$ with $28$ years to maturity. The YTM is $7\mathrm{.}5\%,$ what is the value of the bond if bond pays semi$-$annual coupon payment?

$1\mathrm{.}2$ What happens to the price of OMB bond when the YTM increases to $8\mathrm{.}8\%?$

$1\mathrm{.}3$ What is the percentage change in the price of the longer bond?

$1\mathrm{.}4$ OMB shorter bonds offer the same coupon rate of $3\mathrm{.}5\%$ with $5$ years to maturity. What is the value of bond if YTM is $7\mathrm{.}5\%$ assuming bond pays semi$-$annual coupon payment?

$1\mathrm{.}5$ What happens to the price of OMB shorter bond when the YTM increases to $8\mathrm{.}8\%?$

$1\mathrm{.}6$ What is the percentage change in the price of the shorter bond?

Price@YTM $7\mathrm{.}5\%$ Price@YTM$8\mathrm{.}80\%$

$\%$ change in price

OMB $28$ years bonds

OMB $5$ years bonds

$1\mathrm{.}7$ What can you conclude regarding the interest rate risk of shorter bond vs$.$ longer bond?