Question 5 A. Calculate the annual return on the following bond: G $1,000 Bond Maturity Value Coupon (Annual - 1 per year) Maturity (Years) Bonds current selling price - Value 62.50 25 $1,051.87 Current Market Interest Rate B. Using the interest rate calculated above (Part A - Current Market Interest Rate), what i the value of the following similar bond: Bond $1,000 Maturity Value Coupon (Annual - 1 per year) Maturity (Years) 62.50 10 From Part A Current Market Interest Rate Bond's current selling price - Value C. What is the value of these bonds if one year later, market interest rates changed to 6.50%? Recalculate the values of the two bonds noted below, assume that coupon is paid once a year but that the interest rate is now 6.50%: G Bond $1,000 Maturity Value Coupon (Annual -1 per year) Maturity Years) $1,000 62.50 62.50 24 9 Current Market Interest Rate 6.50% 6.50% New Value of Bonds D. Calculate the dollar amount and percentage change in the value of these two bonds: Bond G Change in Value - S Amount Change in Value - XX.XX% E. Which bond had the more severe price reaction? What observation can you make regarding the price reaction