Bond A is a semiannually compounded, zero-coupon bond with a face value of $1,000.00.
At issuance, the market interest rate for bonds with a similar risk profile was 6.50%.
For Bond A, given different bond maturities (Column A), compute Bond A’s price at a market interest rate
of 6.50% (Column B) and 10.00% (Column C). Next, compute the percent change in Bond A’s prices as
the market interest rate increases from 6.50% to 10.00% (Column D). Essentially, Column D is measuring
the bond’s sensitivity to interest rate changes.