b. Kd = 10.25% Calculate the price for both bonds using your financial calculator. Write out each variable and its numeric input value. (n=8, i=8.0% etc.)

Bond P, Kd=10.25% Bond Q, Kd=10.25%

c. Calculate the % change in price for Bond P at Kd=8.0% to price at Kd=10.25%. Use: ((Second price first price) / first price) *100

d. Calculate the % change in price for Bond Q from Kd=8.0% to price at Kd=10.25%. e. Observations on the effect changes in Kd (interest rate price risk) have on bonds of different maturities?

10. Bonds P and Q are identical except for the amount of time until maturity. Both Bonds: $1000 face value, coupon rate of 8.50% payable semi-annually. Bond P: 6 years to maturity. Bond Q: 11 years until maturity. a. Kd = 8.0% Calculate the price for both bonds using the bond formula. Show all work. Bond P, Kd=8.0% Bond Q, Kd=8.0%