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Exactly 10 years ago, your dad purchased 100 30-yr ABC bonds and 50 20-yr XYZ bonds. The coupon rate on bond ABC is 10% and

Exactly 10 years ago, your dad purchased 100 30-yr ABC bonds and 50 20-yr XYZ bonds. The coupon rate on bond ABC is 10% and the coupon rate on bond XYZ is 7%. Coupons are paid semi-annually. The bonds face value is $1,000. Today is the 25th of September 2021. a) How much money should your dad have paid originally for these bonds assuming he purchased them at PAR. (1pt) b) What is the current (market) value of your dads investments if the current (market) interest rate is 10%? (5pt) c) If interest rates were to increase by 1% (i.e.: the new rate = 11%) how much will be your dads losses on ABC bonds? (3.5pt) d) Today, if interest rates increase by 1% (i.e.: the new rate = 11%) how much will be your dads losses on XYZ bonds? (3.5pt) e) Today, if interest rates increase by 1% (i.e.: the new rate = 11%) how much will be your dads total losses on both ABC and XYZ bonds? (1pt) f) Today, if interest rates decrease by 1% (i.e.: the new rate = 9%) how much will be your dads gains on ABC bonds? (3.5pt) g) Today, if interest rates decrease by 1% (i.e.: the new rate = 9%) how much will be your dads gains on XYZ bonds? (3.5pt) h) Today, if interest rates decrease by 1% (i.e.: the new rate = 9%) how much will be your dads total gains on both ABC and XYZ bonds? (1pt) i) Which bond has higher sensitivity to interest rates fluctuations (support your answer with numbers)? (3pt) j) On the same excel sheet, draw bond ABC and XYZ price as the YTM moves from 1% to 30% (in 1% increments). (5pt)

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