HM Fox Enterprises has two bond issues outstanding. The first is a $30-$year $9\%$ coupon bond issued $14$ years ago. The second is a $20$ vear $5\%$ coupon bond issued $4$ years ago. Each bond has a face value of $$1,000$ and pays makes annual coupon payments.

a$.$ If the yield to maturity on these bonds is $7\%,$ what is the value of each $$1,000$ bond? $(7$

points$)$

b$.$ Which of the above bonds is more sensitive to interest rate fluctuations? $(7$ points$)$

c$.$ Assuming no change in Fox Corp's bond rating, what has happened to interest rates in

the last $14$ years? What has happened in the last $4$ years? Explain your answer $(6$

points$)$