Compute the duration for each bond.

What do your calculations indicate regarding the relationship between duration and terms to maturity? Between duration and coupon rate?

Estimate the percentage price changes for each of the six bonds using duration when the annual yield changes by (i) -3 %, (ii) -1%, (iii) +1%, and (iv) +3 %.

Compute the actual percentage price change for each bond when the annual yield changes by (i) -3 %, (ii) -1%, (iii) +1%, and (iv) +3 %.

For which bond(s) is the predicted percentage price change most (least) accurate?

Annual Coupon Rate 8% 8 8 0 8 12 Maturity (Years) 1 8 15 4 4 4 Annual Yield to Maturity 8.0% 8.0 8.0 8.0 8.0 8.0 Current Price $1,000 1,000 1,000 731 1,000 1,135 Annual Coupon Rate 8% 8 8 0 8 12 Maturity (Years) 1 8 15 4 4 4 Annual Yield to Maturity 8.0% 8.0 8.0 8.0 8.0 8.0 Current Price $1,000 1,000 1,000 731 1,000 1,135