Question

In: Finance

Bond J has a coupon rate of 4.2 percent. Bond K has a coupon rate of...

Bond J has a coupon rate of 4.2 percent. Bond K has a coupon rate of 14.2 percent. Both bonds have ten years to maturity, a par value of $1,000, and a YTM of 9.4 percent, and both make semiannual payments.
a.

If interest rates suddenly rise by 2 percent, what is the percentage change in the price of these bonds? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)
b. If interest rates suddenly fall by 2 percent instead, what is the percentage change in the price of these bonds?

Solutions

Expert Solution

SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

jeff jeffy answered 11 months ago
Next > < Previous

Related Solutions

Bond J has a coupon of 4.2 percent. Bond K has a coupon of 8.2 percent....
Bond J has a coupon of 4.2 percent. Bond K has a coupon of 8.2 percent. Both bonds have 10 years to maturity and have a YTM of 6 percent. a. If interest rates suddenly rise by 1 percent, what is the percentage price change of these bonds? Bond J: Bond K: b. If interest rates suddenly fall by 1 percent, what is the percentage price change of these bonds? Bond J: Bond K:
Bond J has a coupon rate of 4 percent. Bond K has a coupon rate of...
Bond J has a coupon rate of 4 percent. Bond K has a coupon rate of 14 percent. Both bonds have 17 years to maturity, a par value of $1,000, and a YTM of 8 percent, and both make semiannual payments. a. If interest rates suddenly rise by 2 percent, what is the percentage change in the price of these bonds? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers as...
Bond J has a coupon rate of 3 percent. Bond K has a coupon rate of...
Bond J has a coupon rate of 3 percent. Bond K has a coupon rate of 9 percent. Both bonds have 14 years to maturity, make semiannual payments, and have a YTM of 6 percent. If interest rates suddenly rise by 2 percent, what is the percentage price change of these bonds? 1.Percentage change in price of Bond _______ J% 2.Percentage change in price of Bond_______ K% What if rates suddenly fall by 2 percent instead? 3.Percentage change in price...
Bond J has a coupon rate of 5 percent. Bond K has a coupon rate of...
Bond J has a coupon rate of 5 percent. Bond K has a coupon rate of 9 percent. Both bonds have 9 years to maturity, make semiannual payments, and have a YTM of 7 percent. If interest rates suddenly rise by 4 percent, what is the percentage price change of Bond J? -23.65% -21.67% -22.67% -23.67% If interest rates suddenly rise by 4 percent, what is the percentage price change of Bond K? 31.98% -21.57% -19.59% -21.59% If interest rates...
Bond J has a coupon rate of 5.5 percent. Bond K has a coupon rate of...
Bond J has a coupon rate of 5.5 percent. Bond K has a coupon rate of 15.5 percent. Both bonds have eight years to maturity, a par value of $1,000, and a YTM of 12 percent, and both make semiannual payments. a. If interest rates suddenly rise by 3 percent, what is the percentage change in the price of these bonds? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers...
Bond J has a coupon rate of 3 percent. Bond K has a coupon rate of...
Bond J has a coupon rate of 3 percent. Bond K has a coupon rate of 9 percent. Both bonds have 14 years to maturity, make semiannual payments, and have a YTM of 6 percent. If interest rates suddenly rise by 2 percent, what is the percentage price change of these bonds? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g.,...
Bond J has a coupon rate of 6 percent. Bond K has a coupon rate of...
Bond J has a coupon rate of 6 percent. Bond K has a coupon rate of 10 percent. Both bonds have 10 years to maturity, make semiannual payments, and have a YTM of 7 percent.    If interest rates suddenly rise by 3 percent, what is the percentage price change of Bond J? -19.16% -19.18% -17.18% -18.18%    If interest rates suddenly rise by 3 percent, what is the percentage price change of Bond K? 32.91% -17.57% -15.57% -17.55%   ...
Bond J has a coupon rate of 3 percent and Bond K has a coupon rate...
Bond J has a coupon rate of 3 percent and Bond K has a coupon rate of 9 percent. Both bonds have 16 years to maturity, make semiannual payments, and have a YTM of 6 percent. a. If interest rates suddenly rise by 2 percent, what is the percentage price change of these bonds? b. What if rates suddenly fall by 2 percent instead? a. Bond J- _____% Bond K - ______% b. Bond J- _____% Bond K- ______%
Bond J has a coupon rate of 5 percent. Bond K has a coupon rate of...
Bond J has a coupon rate of 5 percent. Bond K has a coupon rate of 10 percent. Both bonds have 9 years to maturity, make semiannual payments, and have a YTM of 6 percent. A. If interest rates suddenly rise by 3 percent, what is the percentage price change of Bond J? B.   If interest rates suddenly rise by 3 percent, what is the percentage price change of Bond K? C. If interest rates suddenly fall by 3 percent,...
Bond J has a coupon rate of 7 percent and Bond K has a coupon rate...
Bond J has a coupon rate of 7 percent and Bond K has a coupon rate of 13 percent. Both have 12 years to maturity, both make semiannual payments, and both have a YTM of 10 percent. a.) If interest rates suddenly rise by 2 percent, what's the percentage price change of these bonds? b.) If rates suddenly fall by 2 percent instead? Fill in the table with answers. a.) Bond J ???? % a.) Bond K ???? % b.)...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT