Interest rate risk and bond price changes Apex Corp. has two outstanding bond issues. One issue consists of 5% annual coupon bonds and the other issue consists of zero-coupon bonds. For each bond issue, calculate the bond prices and percentage change in prices when the required rate of return changes from 5% to 6%.

1. Ten years to maturity and the required rate of return goes from 5% to 6%.
2. Twenty years to maturity and the required rate of return goes from 5% to 6%.
3. Ten years to maturity and the required rate of return goes from 5% to 4%.
4. Twenty years to maturity and the required rate of return goes from 5% to 4%.
5. Compare and contrast your answers for parts a through d and comment on your observations.