Calculate the % change in price for each bond between the price at a 5% YTM and the price at a 6% YTM.

Which of the bonds has the biggest percentage change in price when the yield changes from 5% to 6%?  Why do you think the bond you identified has the most sensitive price with respect to a 1% change in the YTM?

Which of the bonds has the smallest percentage change in price when the yield changes from 5% to 6%?  Why do you think the bond you identified has the least sensitive price with respect to a 1% change in the YTM?

Consider the following six bonds with a face value of $1,000 each and with annual coupons. Annual Coupons Maturity in years Bond A B C D E F 0% 0% 5% 5% 8% 8% 3 20 3 20 3 20 1. Calculate the price of each bond at a yield to maturity (YTM) of 5%. The YTM is expressed as an effective annualized yield. 2. Calculate the price of each bond at a YTM of 6%