Consider a five-year, 15 percent annual coupon bond with a face value of $1,000.The bond is trading at a market yield to maturity of 12 percent.

a)What is the price of the bond?

b)If the market yield to maturity increases 1 percent, what will be the bond's new price?

c)Using your answers to parts (a) and (b), what is the percentage change in the bond's price as a result of the 1 percent increase in interest rates?