Question: ( i ) A Treasury bond with 1 0 0 maturity face value has a 9 annual coupon and 1 5 years left to maturity.

(i) A Treasury bond with 100 maturity face value has a 9 annual coupon and 15 years left to maturity. What price will the bond sell for assuming that the 15 year yield to maturity in the market is 4%,9% and 14% respectively? (Show your workings in full)(8 marks)
(ii) Without using any further calculations, comment on whether the price movements would have been greater or smaller if instead of using a 15 year bond a 10 year bond had been used. (2)

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