Mason, Inc. has two bond issues outstanding, called Series A and Series B both paying the same

Question:

Mason, Inc. has two bond issues outstanding, called Series A and Series B both paying the same annual interest of $55. Series A has a maturity of 12years, whereas Series B has a maturity of 1 year.

a. What would be the value of each of these bonds when the going interest rate is (1) 4 percent, (2) 7 percent, and (3) 10 percent? Assume that there is only one more interest payment to be made on the Series B bonds.

b. Why does the longer-term (12-year) bond fluctuate more when interest rates change than does the shorter-term (1-year) bond?

Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...