$ ww Consider two 30-year maturity bonds. Bond A has a coupon rate of 4%, while bond B has a coupon rate of 12%. Both bonds pay their coupons semiannually. a. Compute the prices of the two bonds at each interest rate. (Round the bond price to 2 decimal places.) b. Suppose Bond A is currently priced to offer a yield to maturity of 8%, Calculate the (percentage) capital gain or loss on the bond if its yield immediately changes to each value of yield to maturity. (Enter your answers as a percent rounded to the nearest whole percent.) c. Suppose Bond B is currently priced to offer a yield to maturity of 8%. Calculate the (percentage) capital gain or loss on the bond if its yield immediately changes to each value of yield to maturity. (Enter your answers as a percent rounded to the nearest whole percent.) d. Which bond's price exhibits greater proportional sensitivity to changes in its yield? In other words, which bond has greater interest rate risk? e. Which bond pays a high coupon rate has lower "average" or "effective maturity than a bond that pays a low coupon rate? Complete this question by entering your answers in the tabs below. Required a Required b Required c Required d Required e Compute the prices of the two bonds (using Excel's bond price function) at each interest rate. (Round the bond price to 2 decimal places.) Price A Yield 2% 3% 4% 5% 6% 7% 8% 9% 10% 11% 12% 13% Price B Prev 12 of 28 # Next > yield immediately changes to each value of yield to maturity. (Enter your answers as a percent rounc percent.) c. Suppose Bond B is currently priced to offer a yield to maturity of 8%. Calculate the (percentage) cap yield immediately changes to each value of yield to maturity. (Enter your answers as a percent round percent.) d. Which bond's price exhibits greater proportional sensitivity to changes in its yield? In other words, w rate risk? e. Which bond pays a high coupon rate has lower "average" or "effective" maturity than a bond that pa Complete this question by entering your answers in the tabs below. Required c Required d Required e Compute the prices of the two bonds (using Excel's bond price function) at each interest rate. (Round the be decimal places.) Required a Required b Yield Price A 2% 3% 4% 5% 6% 7% 8% 9% 10% 11% 12% 13% 14% 15% Price B percent.) d. Which bond's price exhibits greater proportional sensitivity to changes in rate risk? e. Which bond pays a high coupon rate has lower "average" or "effective" Complete this question by entering your answers in the tabs below. Required a Required b Yield 2% 3% 4% 5% 6% Suppose Bond A is currently priced to offer a yield to maturity of 8%. Calculate bond if its yield immediately changes to each value in yield to maturity. 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Suppose Bond A is currently priced to offer a yield to maturity of 8%. C yield immediately changes to each value of yield to maturity. (Enter your percent.) c. Suppose Bond B is currently priced to offer a yield to maturity of 8%. C yield immediately changes to each value of yield to maturity. (Enter your percent.) d. Which bond's price exhibits greater proportional sensitivity to changes rate risk? e. Which bond pays a high coupon rate has lower "average" or "effective" Complete this question by entering your answers in the tabs below. Required a Required b Required c High sensitivity bond Required d Required e Which bond's price exhibits greater proportional sensitivity to changes in its y Consider two 30-year maturity bonds. Bond A has a coupon rate of 4%, while bond B coupons semiannually. a. Compute the prices of the two bonds at each interest rate. (Round the bond price t b. Suppose Bond A is currently priced to offer a yield to maturity of 8%. Calculate the ( yield immediately changes to each value of yield to maturity. (Enter your answers as a percent.) c. Suppose Bond B is currently priced to offer a yield to maturity of 8%. Calculate the (p yield immediately changes to each value of yield to maturity. (Enter your answers as a percent.) d. Which bond's price exhibits greater proportional sensitivity to changes in its yield? In rate risk? e. Which bond pays a high coupon rate has lower "average" or "effective" maturity thar Complete this question by entering your answers in the tabs below. Required a Required b Required c Required d Required e Which bond pays a high coupon rate has lower "average" or "effective" maturity than a bon Bond coupon rate
