Given a 10-year, 8% coupon bond with a face value of $100 and semiannual coupon payments:

a. Generate the bond’s price-yield curve using annual yields ranging from 5%

to 10% and differing by .5%.

b. What is the price change when the yield increases from 8% to 8.5%?

c. What is the price change when the yield decreases from 8% to 7.5%?

d. Comment on the capital gain and capital loss you observe in

(b) and (c).

e. Comment on the features of the price-yield curve.