There are two bonds available:

Bond A that pays a semi-annual coupon at a rate of 4% per annum and matures in 4 years;

Bond B that pays a semi-annual coupon at a rate of 7% per annum and matures in 4 years.

The yield curve is flat at 6% per annum.

a) Calculate the duration of each bond manually, then check your answers in Excel.

How does coupon rate affect duration?

b) If the interest rates change to 6.25%, what are the prices of the bonds?

What are the prices if interest rates change to 7.50% instead?

A and B please?