A. Draw and explain relationships with example.

C. Which bond have higher or lower value and why?

a)Describe the relationship between bond price and interest rate with example. Why do you think some bonds are sold at par, while other are sold either at discount or premium? Using the graph show the relationship between bond price and yield to maturity c) Assuming the two coupon bearing bonds offer similar coupon and similar YTM, but they differ in term to maturity (let say 5 years and 10 years). Which bond will have higher or lower value and why