Question: As a financial security analyst consider BondAthat has just been issued. Its face value is $1,000with coupon rate of 5% and matures in10 years. BondBwas

As a financial security analyst consider BondAthat has just been issued. Its face value is $1,000with coupon rate of 5% and matures in10 years. BondBwas issued 5 years ago, when interest rates were higher. This bond has $1,000 face valuewith 7% coupon rate.When issued, this bond had a 15-year maturity, so its remaining maturity is 10 years. Assume annualcouponpayments and a 9 percent yield to maturity on the bonds.Assume issuance date was 1^stJanuary for both Bonds.

Compute the price of the two bonds.(2 marks)
Find the price of the two bonds using Excel function(2 Marks)
Compute the duration of bondAand bondB.(2 Marks).
Which bond has longer duration? Give reasons why.(1 Mark)
Givingreasons,statewhether the two bonds are selling at a premium, discount or par and why(1 Mark)
Repeat (a) above assuming that the bondspay semi-annual coupons(2 Marks)

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