The University of California has two bonds outstanding. Both issues have the same credit rating, a face value of $1,000 and a coupon rate of 4%. Coupons are paid twice a year. Bond A matures in 1 year, while bond B matures in 30 years.

The market interest rate for similar bonds is 8%.

part 1: what is the price of bond A

part 2: What is the price of bond B

part 3: Now assume that yields increase to 11%. What is the price of bond A?

part 4: What is the price of bond B now ?