Question: 4. Answer the questions below for bonds A and B. Bond B Bond A 8% 8% 9% 89 Coupon Yield to maturity Maturity (years) Par
4. Answer the questions below for bonds A and B. Bond B Bond A 8% 8% 9% 89 Coupon Yield to maturity Maturity (years) Par Price $100.00 $100.00 $100.00 $104.055 a) Calculate the actual price of the bonds for a 100-basis-point increase in interest rates. (b) Without working through calculations, indicate whether the duration of the two bonds would be higher or lower if the yield to maturity is 10% rather than 8%. 4. Answer the questions below for bonds A and B. Bond B Bond A 8% 8% 9% 89 Coupon Yield to maturity Maturity (years) Par Price $100.00 $100.00 $100.00 $104.055 a) Calculate the actual price of the bonds for a 100-basis-point increase in interest rates. (b) Without working through calculations, indicate whether the duration of the two bonds would be higher or lower if the yield to maturity is 10% rather than 8%
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