Nirmo Power and Light has two P1,000 par value bonds outstanding. Bond X matures in five years and Bond Y matures in 15 years. Both bonds pay P80 interest annually and currently sell at their par value. Thus, the current required rate of return is 8 percent.

1. Which bond should show the greater price change in response to an increase in the required rate of return?
2. What is the intrinsic value of each bond if the required rate of return is 9 percent?
3. Compare the price changes in the two bonds when the required rate of return changes to 9 percent.