Question: I need calculation and answer written out, please do not show or use excel for this. Problem 6. [4 pts] The current rate of inflation

I need calculation and answer written out, please do not show or use excel for this.

Problem 6. [4 pts] The current rate of inflation is 2%, and long-term Treasury bonds are yielding 5%. You estimate that the rate of inflation will increase to 3.5%. What do you expect to happen to long-term bond yields? (Explain your answer). Compute the effect of this change in inflation on the price of a 15-year, 12% coupon bond with a current yield to maturity of 8.0%

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