Interest Rate Risk Consider three bonds with 12.06% coupon rates, all selling at face value. The short-term bond has a maturity of 4 years, the intermediate-term bond has maturity 8 years, and the long-term bond has maturity 30 years. a. What will be the price of each bond if their yields increase to 14.5%? (Do not round intermediate calculations. Round your answers to 2 decimal places.) 4 Years 8 Years 30 Years Bond price b. What will be the price of each bond if their yields decrease to 10.9%? (Do not round intermediate calculations. Round your answers to 2 decimal places.) 4 Years 8 Years 30 Years Bond price $ $ $ c. Which bond is most sensitive to changes in the interest rates? 4 Year 30 Year 8 Year They are all the same d. When interest rates rise then the price of the bond (Click to select) c. Are long-term bonds more or less affected than short-term bonds by a rise in interest rates? More affected Less affected d. Would you expect long-term bonds to be more or less affected by a fall in interest rates? More affected Less affected Interest Rate Risk Consider three bonds with 12.06% coupon rates, all selling at face value. The short-term bond has a maturity of 4 years, the intermediate-term bond has maturity 8 years, and the long-term bond has maturity 30 years. a. What will be the price of each bond if their yields increase to 14.5%? (Do not round intermediate calculations. Round your answers to 2 decimal places.) 4 Years 8 Years 30 Years Bond price b. What will be the price of each bond if their yields decrease to 10.9%? (Do not round intermediate calculations. Round your answers to 2 decimal places.) 4 Years 8 Years 30 Years Bond price $ $ $ c. Which bond is most sensitive to changes in the interest rates? 4 Year 30 Year 8 Year They are all the same d. When interest rates rise then the price of the bond (Click to select) c. Are long-term bonds more or less affected than short-term bonds by a rise in interest rates? More affected Less affected d. Would you expect long-term bonds to be more or less affected by a fall in interest rates? More affected Less affected