Great Deals LLC appointed you as a financial analyst, and provided you the following information about three bonds:

Bonds	A	B	C
Term to maturity (years)	20	20	25
Annual coupon rate	7.5%	5%	10%
Frequency of coupons	Semi annual	Semi annual	Semi annual
Face value	$1,000	$1,000	$1,000
YTM
old	7.5%	7.5%	7.5%
new	9%	9%	9%

(a) Estimate the value of Bonds A, B and C, based on the old YTM of 7.5%.

(b) If the interest rates increase from 7.5% to 9% for Bonds A and B, what can you observe on the relationship between the term to maturity and price risk? Show your workings.

(c) If the interest rates increase from 7.5% to 9% for Bonds B and C, what can you observe on the relationship between the coupon rate and price risk? Show your workings.

(d) Out of the three bonds, which one would you recommend if you want to reduce the chance of a depreciation in the value of the bond? Explain your answer. [