With celebrity bonds, celebrities raise money by issuing bonds to investors. The royalties from sales of the music are used to pay interest and principal on the bonds. In April of 2009, EMI announced that it intended to securitize its back catalogue with the help of the Bank of Scotland. The bond was issued with a coupon rate of 6.7% and will mature on this day 38 years from now. The yield on the bond issue is currently 6.4%. At what price should this bond trade today, assuming a face value of $1,000 and annual coupons?

What is the percentage change in price for a zero coupon bond if the yield changes from 6.5% to 8.5%? The bond has a face value of $1,000 and it matures in 8 years. Use the price determined from the first yield, 6.5%, as the base in the percentage calculation.