Question: 7 years ago, Embraer issued a semi-annual coupon bond with 13 year to maturity. The bond was originally issued at par with a 1000$ face value. The coupon rate on the bond is 8% and the yield to maturity is currently 7% (for all maturities). Assume an investor bought the bond when it was issued 7 years ago, and sells the bond today. What would be the investors capital gain or loss in % for the complete investing period?

The 7-year capital gain or loss in percentage terms is __________ (4 decimals)

Question: Which one of the following decreases the sensitivity of coupon bond prices to the changes of interest rate?

A) increase in maturity

B) Decrease in coupon rate

C) Decrease in yield to maturity (YTM)

D) Decrease in maturity

E) Change in coupon payment frequency from semi-annual to annual