Consider three bonds with 5.2% coupon rates, all selling at face value. The short-term bond has a

Consider three bonds with 5.2% coupon rates, all selling at face value. The short-term bond has a maturity of 4 years, the intermediate-term bond has maturity 8 years, and the long-term bond has maturity 30 years.

a.	What will be the price of each bond if their yields increase to 6.2%? (Do not round intermediate calculations. Round your answers to 2 decimal places.)

	4 Years	8 Years	30 Years
Bond price	$ 965.51	$ 938.39	$ 865.25

b.	What will be the price of each bond if their yields decrease to 4.2%? (Do not round intermediate calculations. Round your answers to 2 decimal places.)

	4 Years	8 Years	30 Years
Bond price	$ 1,036.13	$ 1,066.77	$ 1,168.80

 Explanation:

a. & b.

Price of Each Bond at Different Yields to Maturity
	Maturity of Bond
Yield	4 Years		8 Years		30 Years
4.2%	$	1,036.13	$	1,066.77	$	1,168.80
5.2%	$	1,000.00	$	1,000.00	$	1,000.00
6.2%	$	965.51	$	938.39	$	865.25