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( 2 0 points ) On August 1 9 , 2 0 1 9 , both two - year interest rate and three - year
points On August both twoyear interest rate and threeyear interest rate are around Calculate the bonds price for a twoyear coupon bond with a face value $ dollars and coupons $ dollars. Calculate the bonds price for a threeyear coupon bond with a face value $ dollars and coupons $ dollars. Suppose both interest rates increases from to what are the new bonds prices of twoyear and threeyear coupon bonds? According to the calculation results, which bond price is more sensitive to interest rate changes. Hints: the coupons for coupon bonds are paid annually.
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