For the following bonds, and given the yield curve, choose a bond which give you a positive change in price, then calculate the change in price for each bond. Also, for the bond you picked, calculate two zero coupon bonds required to hedge it and plot the value of assets and liabilities as interest rate changes from 1 to 15 percent. The bonds and the yield curve are:

Bonds Type Issue Price Coupon(%) Maturity YTM(%) Curr Yield(%) Fitch Ratings Callable Corp AFLAC INC 128.69 8.5 15-May-19 1.949 6.605 A No Corp AVON PRODS INC 100 5 15-Mar-23 4.999 5.000 BBB No Corp APPLE INC 96.76 2.4 3-May-23 2.829 2.480 AA No

Yield Curve Time 1mo 3 mo 6 mo 1 yr 2 yr 3 yr 5 yr 7 yr 10 yr 20 yr 30 yr rate 4.75 5.02 5.09 5 4.82 4.74 4.7 4.7 4.71 4.91 4.81

Use 10/10/2014 as the settlement date for all bonds, use integers for differences in years, discard the convexity part of the bond equation.