Please answer both question :

Consider the following bonds:

Bond	Coupon Rate (annual payments)	Maturity (years)
A	0.0%	15
B	0.0%	10
C	4.3%	15
D	7.9%	10

What is the percentage change in the price of each bond if its yield to maturity falls from6.3 %to5.3 %?

The price of bond A at6.3 %YTM per$ 100face value is$ . (Round to the nearest cent.)

The price of bond A at5.3 %YTM per$ 100face value is$ .(Round to the nearest cent.)

The percentage change in the price of bond A is %. (Round to one decimal place.)

The price of bond B at6.3 %YTM per$ 100face value is$ . (Round to the nearest cent.)

The price of bond B at5.3 %YTM per$ 100face value is $ . (Round to the nearest cent.)

The percentage change in the price of bond B is %. (Round to one decimal place.)

The price of bond C at6.3 %YTM per$ 100face value is$ . (Round to the nearest cent.)

The price of bond C at5.3 %YTM per$ 100face value is$ .(Roundto the nearest cent.)

The percentage change in the price of bond C is %. (Round to one decimal place.)

The price of bond D at 6.3 %YTM per$ 100face value is$ .(Round to the nearest cent.)

The price of bond D at 5.3 %YTM per $ 100face value is $. (Round to the nearest cent.)

The percentage change in the price of bond D is %. (Round to one decimal place.)

q2 For each of the following pairs of Treasury securities (each with$ 1 000par value), identify which will have the higher price:

a. A three-year zero-coupon bond or a five-year zero-coupon bond?

Which will have the higher price?(Select the best choice below.)

A.A three-year zero-coupon bond, because the present value is received sooner and the future value is higher.

B.A three-year zero-coupon bond, because the future value is received sooner and the present value is higher.

C.A five-year zero-coupon bond, because the future value is received later and the present value is higher.

D.A five-year zero-coupon bond, because the present value is received sooner and the future value is higher.

b. A three-year zero-coupon bond or a three-year4 %coupon bond?Which will have the higher price?

A.The three-year4 %coupon bond, because the 4 %coupon bond pays interest payments; whereas the zero-coupon bond is a pure discount bond.

B.The three-year zero-coupon bond, because a pure discount bond pays higher interest payments than a 4 %coupon bond.

C.Since they both have a three-year maturity, they are equal in price.

D.The three-year zero-coupon bond, because the zero-coupon bond is risk-free.

c. A two-year5 %coupon bond or a two-year6 %coupon bond?Which will have the higher price?

A.The two-year5 %coupon bond, because the coupon (interest) payments are higher, even though the timing is the same.

B.The two-year5 %coupon bond, because the future value will be received sooner, therefore the present value must be higher.

C.The two-year6 %coupon bond, because the coupon (interest) payments are higher, even though the timing is the same.

D.Because they are both two-year coupon bonds, they are equal in price.