Suppose that there exist two bonds with the following characteristics: Bond A B Term to Maturity 3 уears 4 years Face Value £1,000 £1,000 Сoupon Rate 2% 5% Yield to Maturity 10% 10% 2.1 How can the...

Extracted text: Suppose that there exist two bonds with the following characteristics: Bond A B Term to Maturity 3 уears 4 years Face Value £1,000 £1,000 Сoupon Rate 2% 5% Yield to Maturity 10% 10% 2.1 How can the market prices of Bonds A and B be affected by a change of the yield to maturity from 10% to 5% (for both of them) and from 10% to 15% (for both of them)? 2.2 Discuss and evaluate your findings by also analysing the bond duration for Bond A and B.