a) Compare the price sensitivity to changes in interest rates for the following bonds: (i) 7 percent annual coupon bond, with 5 years to maturity, currently sell at par.

(ii) 7 percent annual coupon bond, with 10 years to maturity, currently sell at par. If the interest rates increase to 8 percent, calculate the percentage change in price for both bonds and explain why is there a difference in the price change?