What will be the price of the bond

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Question - Consider three bonds with 6.40% coupon rates, all making annual coupon payments and all selling at face value. The short-term bond has a maturity of 4 years, the intermediate-term bond has a maturity of 8 years, and the long-term bond has a maturity of 30 years.

a. What will be the price of the 4-year bond if its yield increases to 7.40%?

b. What will be the price of the 8-year bond if its yield increases to 7.40%?

c. What will be the price of the 30-year bond if its yield increases to 7.40%?

Reference no: EM132175452

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