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Consider three bonds with 5 % coupon rates, all selling at face value. The short - term bond has a maturity of 4 years, the

Consider three bonds with 5% coupon rates, all selling at face value. The short-term bond has a maturity of 4 years, the intermediate-term bond has maturity 8 years, and the long-term bond has maturity 30 years.
a.
What will be the price of each bond if their yields increase to 5.7%?(Do not round intermediate calculations. Round your answers to 2 decimal places.)
4 Years 8 Years 30 Years
Bond price $
$
$
b.
What will be the price of each bond if their yields decrease to 4%?(Do not round intermediate calculations. Round your answers to 2 decimal places.)
4 Years 8 Years 30 Years
Bond price $
$
$
c. Which bond is most sensitive to changes in the interest rates?multiple choice 1
4 Year
8 Year
30 Year
They are all the same
d. When interest rates rise then the price of the bond
fall
c. Are long-term bonds more or less affected than short-term bonds by a rise in interest rates?
multiple choice 3
More affected
Less affected
d.Would you expect long-term bonds to be more or less affected by a fall in interest rates?
multiple choice 4
More affected
Less affected

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