Consider the following bonds: Coupon Rate Maturity Bond (annual payments) (years) A 0% 15 B 0% 10 C 4% 15 D 8% 10 a. What is the percentage change in the price of each bond if its yield to maturity falls from 6% to 5%? b. Which of the bonds A-D is most sensitive to a 1% drop in interest rates from 6% to 5%? Which bond is the least sensitive? Par value Old YTM $1,000 6% 5% New YTM a. What is the percentage change in the price of each bond if its yield to maturity falls from 6% to 5%? Annual Coupon Coupon Rate Maturity Old Price New Price Change Rank Bond A 0% 15 B 0% 10 C 4% 15 D 8% 10 b. Which of the bonds A-D is most sensitive to a 1% drop in interest rates from 6% to 5%? Which bond is the least sensitive? Bond is the most sensitive to changes in bond yields. Bond is the least sensitive to changes in bond yields