Consider two 30-year maturity bonds. Bond A has a coupon rate of 4%, while bond B has a coupon rate of 12%. Both bonds pay their coupons semiannually.

a. Compute the prices of the two bonds (using Excels bond price function) at each interest rate. (Do not round intermediate calculations. Round your answers to 2 decimal places.) (2% to 15%)

b. Suppose Bond A is currently priced to offer a yield to maturity of 8%. Calculate the (percentage) capital gain or loss on the bond if its yield immediately changes to each value in yield to maturity. (Do not round intermediate calculations. Loss amounts should be indicated by a minus sign.) (2% to 15%)

c. Suppose Bond B is currently priced to offer a yield to maturity of 8%. Calculate the (percentage) capital gain or loss on the bond if its yield immediately changes to each value in yield to maturity. (Do not round intermediate calculations. Loss amounts should be indicated by a minus sign.) (2% to 15%)

d. Which bonds price exhibits greater proportional sensitivity to changes in its yield?

e. Which bond pays a high coupon rate has lower average or effective maturity than a bond that pays a low coupon rate?)