Consider a 30 year US Treasury bond This bond has a 2 875 coupon interest rate, a par value of $100 and the coupon payment frequency is semi annual The bond is priced at $92 8480 with a 3 25 yield Calculate the price for this bond using a 4 25 yield Calculate the price for this bond using an 2 25 yield What do you observe about your results in a) and b) compared with the initial price You must explain your answers clearly

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Question: Consider a 30-year US Treasury bond. This bond has a 2.875% coupon interest rate, a par value of $100 and the coupon payment frequency is

Consider a 30-year US Treasury bond. This bond has a 2.875% coupon interest rate, a par value of $100 and the coupon payment frequency is semi-annual. The bond is priced at $92.8480 with a 3.25% yield.

Calculate the price for this bond using a 4.25% yield.
Calculate the price for this bond using an 2.25% yield.
What do you observe about your results in a) and b) compared with the initial price?

You must explain your answers clearly.

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