Consider a 6-year 8%-coupon bond with semi-annual coupon payments and par value of $1000.

(a) What is the price of the bond if its YTM is 10%?

(b) If YTM decreases by 1 basis point, calculate the change of bond price in relative terms.

(c) Is the effect of 1 basis point decrease in YTM on an all-else-equal 20-year coupon bond larger,

equal to, or smaller than that in (b)? Explain to receive full credit.