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Calculate the percentage change in the prices relative

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You are considering investing in one of these two bonds. Both bonds have 10 years remaining to maturity and par value of TL1.000. Bond A has a semiannual coupon rate of 4% and Bond B has a semiannual coupon rate of 12%.

Question a) Calculate the price of these bonds when their yield to maturity is 8%

Question b) Suppose yield to maturity on these bonds increases by 2% now. Calculate the price of these bonds with this new yield to maturity

Question c) Calculate the percentage change in their prices relative to their prices at 8% yield to maturity. Determine the bond which has a largest change in its price as a result of these in its yield to maturity. Please explain with two or more sentences

Reference no: EM132554848

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