2. D Corporation has three bonds outstanding.All three have a coupon rate of 4 percent and a $1000 par value.The first bond has one year left to maturity.The second bond has 4 years left to maturity.The last bond has 8 years left to maturity.Assume for simplicity that the market rate for all three bonds is now 8 percent and these bonds pay annual interest payments.

What is the value for the first bond with one year left to maturity?___________

What is the value for the second bond with four years left to maturity?______________

What is the value for the first bond with eight years left to maturity?___________

Assuming the same stated interest rate, in an environment of increasing interest rates which bonds will decrease in value the most -- the one with a longer term (duration/maturity) or shorter term (duration/maturity)?