a) What is the price of each of the following bonds ($1,000 principal) if the current interest rate is 9 percent?

b) What is the duration of each bond?
c) Rank the bonds in terms of price fluctuations with the least volatile bond first and the most volatile bond last as judged by each bond's duration.
d) Confirm your volatility rankings by determining the percentage change in the price of each bond if interest rates rise to 12 percent.
e) What generalizations about duration can be made from the above exercise concerning (a) low- versus high-coupon bonds, (b) intermediate- versus long-term bonds, and (c) zero couponbonds?

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Firm A Coupon Maturity Coupon Maturity Coupon Maturity Coupon Maturity Coupon Maturity Coupon Maturity 6% 5 years 6% 20 years 15% 5 years 15% 20 years Firm B Firm C Firm D Firm E 5 years 0% (zero coupon bond) 20 years Firm F