This is your first week as an analyst at a mutual fund. Your boss asked you to evaluate the

price risk of two $30-$year bonds, Bonds A and B$.$ You must complete the following tasks

to prepare a report by $3/19/2024(11$:$59$ p$.$m$.).$

Bond A has a coupon rate of $4\%,$ while bond B has a coupon rate of $13\%.$ Both bonds pay

their coupons semi$-$annually.

A$)$ Construct an Excel spreadsheet showing the prices of each of these bonds for yield to

maturities ranging from $1\%$ to $15\%$ at intervals of $1\%.$ Column A should show the yield

to maturity $($ranging from $1\%$ to $15\%),$ and columns B and C should compute the prices

of the two bonds $($using Excel$$s PV function$)$ at each interest rate.

B$)$ In columns D and E$,$ compute the percentage difference between the bond price and its

value when the yield to maturity is $8\%($initial yield to maturity$).$

C$)$ Plot the values in columns D and E as a function of the interest rate. Which bond$$s

price is proportionally more sensitive to interest rate changes?

Face value $ $1,000\mathrm{.}00$

Coupon rate bond A $4\mathrm{.}00\%$

Coupon rate bond B $13\mathrm{.}00\%$

Term $($Maturity$)30\mathrm{.}00$ years

Initial Yield to maturity $8\mathrm{.}00\%$