1. Bond A and bond B have par values of $1,000. They both have coupon rates of 10%, and they both pay semi-annual interest. Bond A has 3 years left to maturity and bond B has 14 years left to maturity.

1. Calculate the value of each bond for a required return of 5%, 10%, and 15%.

Required return	Value bond A	Value bond B
5%	?	?
10%	?	?
15%	?	?

2. Which bond is more responsive to a change in required return? Why?