A 5-year 10% coupon bond is selling to yield 8%. The bond pays interest annually. The redemption value of the bond is at par.

a. What is the price of the 5-year 10% coupon bond selling to yield 8%?

b. What is the price of this bond one year later assuming the yield is unchanged at 8%?

c. What is the price of this bond if yield has increased from 8% to 12%? Also calculate the price of this bond one year later assuming the yield is 12%.

d. Can you stablish a relationship between the price of the bond and the yield? Explain.

e. Can you stablish a relationship among coupon rate, yield and price change of the bond? Explain.