b. What is the relationship between price and yield?

Price and yield are (Directly/Inversly) Directly Inversely related.

c. What is the relationship between bond price changes and time to maturity?

Bond prices change (more for long terms/less for long terms) more for longer terms, less for longer terms, for a given yield change.

A $1,000 par value bond has a 9 percent coupon, which is paid on a semiannual basis. It matures in either 1 year or 20 years. Current yields on similar bonds are either 6 percent or 10 percent. a. Calculate the price of the bond for the four possibilities. (Use a Financial calculator to arrive at the answers. Do not round Intermediate calculations. Round the final answer to 2 decimal places.) Price of the bond $ $ 1 year 1 year 20 years 20 years 6 percent 10 percent 10 percent 6 percent A A A A $