A 10-year bond is issued with a face value of $1,000, paying interest of $60 a year. Assume yields to maturity increase shortly after the T-bond is issued.

value 7.69 points A 10-year bond is issued with a face value of $1,000, paying interest of $60 a year. Assume yields to maturity increase shortly after the T-bond is issued. a. What happens to the bonds coupon rate? 0 Rises 0 Falls 0 Does not change b. What happens to the band's price? 0 Rises 0 Falls 0 Does not change 6. What happens to the bond's yield to maturity? O Rises 0 Falls 0 Does not change value 759 points In February 2015 Treasury 4 3/45 of 2041 offered a semiannually compounded yield to maturity of 2.70%. Recognizing lhal coupons are paid semiannually, calculate the band's price. Assume face value is $1,000. (Do not round intermediate calculations. Round youranswer to 2 decimal places.) Bond price 5 valu e: 7.59 palms Which comes rst in the market for US. Treasury bonds: a. Spot interest rates or yields to maturity? O Spetinterest rates 0 Yields to maturity b. Bond prices or yields to maturity? 0 Bond prices 0 Yields to maturity value: 169 points If the two-year spot rate is higher than the one-year rate, is the yield to maturity greater or less than the two-year spot rate? 0 Greatei than 0 Less than Value 7.69 points a. An 8%, ve-year bond yields 6%. lfthis yield to maturity remains unchanged. what will be its price one year hence? Assume annual coupon payments and a face value of $100. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Price $ b. What is the total return to an investorwho held the bond overthis year? (Do not round intermediate calculations. Enter your answer as a percent rounded to the nearest whole number.) Total return % Value 7.69 points calculate the durations and volatilities of securities A, B, and C. Their msh ows are shown below. The interest rate is 8%. (Da not round intermediate calculatians. Round "Duration" to 4 decimal places and "Volatility" to 2 decimal places.) Period 1 Period 2 Period 3 A 40 40 40 B 20 20 120 c 10 10 110 Burnt] on Volalllily years years years