A $1,000 par value bond has an 8 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 6 percent or 10 percent.

a. Calculate the price of the bond for the four possibilities.

2 years	6 percent
2 years	10 percent
10 years	10 percent
10 years	6 percent

Determine Bond price

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.