roduce a table showing bond values and interest rate risk over the duration of a bond and a diagram demonstrating the link between interest rate risk and time to maturity. The bond has a face value of $1,000, pays a coupon rate of 9% and is issued with 10 years to maturity. All calculations should be executed in excel. Your table should show the following:

• The value of the bond, year by year, from date of issue until its maturity, assuming all other things remain the same.

• The value of the bond, year by year, from date of issue until its maturity, assuming that market interest rate increases by 2%, all other things remain the same.

• The potential capital gain/ loss, year by year, from the date of issue until its maturity

• The interest rate risk (%), year by year, for each year of maturity. From your table produce a diagram that demonstrates the relationship between interest rate risk and time to maturity.

  The market interest rate (yield to maturity) to be used is 12%, assume that interest rates don't change