A $1,000 par value bond has a 6 percent coupon, which is paid on a semiannual basis. It matures in either 2 years or 10 years. Current yields on similar bonds are either 4 percent or 8 percent.

a. Calculate the price of the bond for the four possibilities. (Use a Financial calculator to arrive at the answers. Do not round intermediate calculations. Round the final answer to 2 decimal places.)

		Price of the bond
2 years	4 percent	$
2 years	8 percent	$
10 years	8 percent	$
10 years	4 percent	$

b. What is the relationship between price and yield?

Price and yield are (Click to select) Directly Inversely related.

c. What is the relationship between bond price changes and time to maturity?

Bond prices change (Click to select) less for longer terms, more for longer terms, for a given yield change.