Question: Consider two bonds that pay holders semi annually: Coupon Rate Par Value Maturity Value/Price Bond A 4% $1000 20 years ? Bond B 3% $1000

Consider two bonds that pay holders semi annually: Coupon Rate Par Value Maturity Value/Price Bond A 4% $1000 20 years ? Bond B 3% $1000 20 years ?

Part A: Calculate the value/price of each bond if the market rate = 4% Do NOT use units, spaces or commas in your answer and round to the nearest cent.

Bond A: CPT PV = Bond B: CPT PV = Part B: Calculate the value/price of each bond if the market rate = 5% Do NOT use units, spaces or commas in your answer and round to the nearest cent. Bond A: CPT PV = Bond B: CPT PV = Round to the nearest cent.

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Which bond experienced the greatest percentage change in value (i.e., which bond's value was most sensitive to changes in the market interest rates?

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