A $$1,000$ bond has a coupon of $5$ percent and matures after $8$ years. Assume that the bond pays interest annually.

a$.$ What would be the bond's price if comparable debt yields $6$ percent? Use Appendix B and Appendix D to answer the question. Round your answer to the nearest dollar.

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b$.$ What would be the price if comparable debt yields $6$ percent and the bond matures after $4$ years? Use Appendix B and Appendix D to answer the que your answer to the nearest dollar.

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c$.$ Why are the prices different in a and $b?$

The price of the bond in $a$ is $($SELECT: lesser or greater$)$ than the price of the bond in $b$ as the principal payment of the bond in a is $($SELECT: further out or closer$)$ than the principal pa bond in $b($in time$).$

d$.$ What are the current yields and the yields to maturity in a and b$?$ Round your answers to two decimal places.

The bond matures after $8$ years:

CY: s

YTM: $\%$

The bond matures after $4$ years:

CY: $\%$

YTM: $\%$

e$.$ If interest rates increase $100$ basis points $($that is$,$ from $6$ percent to $7$ percent$),$ what are the new prices of both bonds assuming annual compoundir Appendix B and Appendix D to answer the question. Round your answer to the nearest dollar.

Bond parts: $

Bond partb: $

f$.$ Calculate the percentage change in the price of each bond. Round your answers to one decimal place. Enter your answers as a positive value.

Bond parts a: $($SELECT: increase or decrease$)$of $\%$

Bond part b : $($SELECT: increase or decrease$)$of $\%$

Interest Factors tor the Present Value of One Dollar

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