Using excel, illustrate and check the following four observations on bonds and interest rate sensitivity.

You can use any set of a given bond's characteristics of your choice.

1. Prices of long-term bonds tend to be more sensitive to interest rate changes than prices of short-term bonds.

2. The sensitivity of bond prices to changes in yields increases at a decreasing rate as maturity increases (interest rate risk is less than proportional to bond maturity)

3. Interest rate risk is inversely related to the bond's coupon rate. Prices of low-coupon bonds are more sensitive to changes in interest rates than prices of high-coupon bonds.

4. The sensitivity of a bond's price to a change in its yield to maturity is inversely related to the yield to maturity at which the bond is currently selling.

You can make up the excel macros.

There is no rush on this, take your time. Thank you.