You and I have decided to buy bonds as an investment for the future. Our bonds have almost the same features: both of them make payments twice a year, are priced at par value, and have an 8% annual coupon rate. However, my bond has 3 years to maturity, whereas yours has 12 years to maturity. a. Demonstrate that our bonds sell at the same price of the par. If interest rates suddenly rise by 2%, what is the percentage change in the price of my bond? What is the percentage change in the price of your bond? b. If rates were to suddenly fall by 2% instead, what would the percentage change in the price of my bond and your bond be respectively? c. What does this problem tell you about the interest rate risk of longer-term bonds?