1.Calculate the price of each bond based on the yields provided in the table.

2.Calculate the Duration of each bond.

3.Now suppose that the yield increases from 6% to 7%. Recalculate the approximate price of each bond using the Duration measure.

4.Comparing bonds A and B, which bonds price is more affected (in percentage terms) by the yield increase? Why?

5.Comparing bonds B and C, which bonds price is more affected (in percentage terms) by the yield increase? Why?

Bond Pricing Coupon, maturity and yield data are provided for three bonds listed below. Assume a principal amount of $1000, and semi-annual coupon payments. BOND COUPON RATE MATURITY YIELD A 6% 5 6% B 6% 25 6% C 12% 25 6%