Question 14 Suppose you have a 20-year bond paying 8% semiannual coupon, with face value of US$100. Assuming that YTM is 7%, 8% and 9%, use the Excel PRICE function to calculate the bond price over time, that is, as we approach maturity. As we approach maturity, what happens to the price of the bond? Hint: Leaving the maturity date constant, change the settlement date by one year at a time to reflect the passage of time. Settlement date Maturity date Coupon rate Face Value Frequency of payments Maturity (years) Market required yield Bond D 7/12/15 7/12/35 8% $1.000 2 20 7,00% Bond E 7/12/15 7/12/35 8% S1.000 2 20 8.00% Bond F 7/12/15 7/12/35 8% $1.000 2 20 9.00% Settlement date 7/12/15 Time to maturity (years) 20 19 18 17 16 15 14 13 12 11 10 9 8 7 6 5 4 3 2 0 7/12/35 1.000,0 1.000,0 1.000,0