There are three bonds, each with a coupon of 6.00%, and maturity of 7, 16 and 25 years. The market interest rate is 6.23% for all maturities. The par is $1,000.

. (a) Find the price of each bond.

. (b) Suppose the market interest rate now increases to 6.95%. For each bond, find the new price and percentage change in the price (which measures the price sensitivity). What is the relationship among the bonds in terms of bond price sensitivity, i.e. interest rate risk?

. (c) Suppose the market interest rate now decreases to 5.95%. For each bond, find the new price, and percentage change in the price as compared to the initial prices found in (a).