Question
In: Finance
Consider the following bonds: Bond Coupon Rate (annual payments) Maturity (years) A 0.00.0% 1515 B 0.00.0%...
Consider the following bonds:
|
Bond |
Coupon Rate (annual payments) |
Maturity (years) |
|
A |
0.00.0% |
1515 |
|
B |
0.00.0% |
1010 |
|
C |
4.24.2% |
1515 |
|
D |
7.77.7% |
1010 |
What is the percentage change in the price of each bond if its yield to maturity falls from
6.8 %6.8%
to
5.8 %5.8%?
The percentage change in the price of bond A is
nothing%.
(Round to one decimal place.)
Solutions
Expert Solution
| As nothing was mentioned excel is used. If you need with “financial formula”, let me know, will do that also. Thank you | ||||||||||
jeff jeffy answered 4 months agoRelated Solutions
Consider the following bonds: Bond Coupon Rate (annual payments) Maturity (years) A 0.0% 15 B 0.0%...
Consider the following bonds:
Bond
Coupon Rate (annual payments)
Maturity (years)
A
0.0%
15
B
0.0%
10
C
4.2%
15
D
7.6%
10
What is the percentage change in the price of each bond if its
yield to maturity falls from
6.1 % to 5.1%?
like,
a.The price of bond A at 6.1 % YTM per $100 face value is $?
b.The price of bond A at 5.1% YTM per $100 face value is $?
c. The percentage change in...
Consider the following bonds: Bond Coupon Rate (Annual Payments) Maturity (years) A 0.0% 15 B 0.0%...
Consider the following bonds:
Bond
Coupon Rate (Annual Payments)
Maturity (years)
A
0.0%
15
B
0.0%
10
C
4.5%
15
D
7.6%
10
1. The price of bond C at 6.7% YTM per $100 face value is:
2.The price of bond C at 5.7% YTM per $100 face value is:
3. The percentage change in the price of Bond C is:
4.The price of bond D at 6.7% YTM per $100 face value is:
5. The price of bond D...
Consider the following bonds: Bond Coupon Rate (annual payments) Maturity (years) A 0.0% 15 B 0.0%...
Consider the following bonds:
Bond
Coupon Rate (annual payments)
Maturity (years)
A
0.0%
15
B
0.0%
10
C
4.2%
15
D
8.2%
10
What is the percentage change in the price of each bond if its
yield to maturity falls from
6.9 % to 5.9 %?
The price of bond A at 6.9% YTM per $100 face value is $?
(Round to the nearest cent.)
Consider the following bonds Bond Coupon Rate (Annual Payments) Maturity(Years) A 3% 8 B 5% 8...
Consider the following bonds
Bond
Coupon Rate (Annual Payments)
Maturity(Years)
A
3%
8
B
5%
8
C
3%
4
D
5%
4
Which of the bonds (A – D) is most sensitive to a 1% increase in
interest rates. Which is least sensitive?
Consider a 8% coupon bond making annual coupon payments with 4 years until maturity and a...
Consider a 8% coupon bond making
annual coupon payments with 4 years until maturity and a
yield to maturity of 10%.
What is the modified duration of this bond?
If the market yield increases by 75 basis points, what is the
actual percentage change in the bond’s
price? [Actual, not approximation]
Given that this bond’s convexity is 14.13, what price would you
predict using the duration-with-convexity
approximation for this bond at this new yield?
What is the percentage error?
Consider a 8% coupon bond making annual coupon payments with 4 years until maturity and a...
Consider a 8% coupon bond making
annual coupon payments with 4 years until maturity and a
yield to maturity of 10%.
What is the modified duration of this bond?
If the market yield increases by 75 basis points, what is the
actual percentage change in the bond’s
price? [Actual, not approximation]
Given that this bond’s convexity is 14.13, what price would you
predict using the duration-with-convexity
approximation for this bond at this new yield?
What is the percentage error?
Please...
Consider the following three bonds: Bond Coupon Rate Maturity (years) Price A 0% 1.0 $947.5572 B...
Consider the following three bonds:
Bond
Coupon Rate
Maturity (years)
Price
A
0%
1.0
$947.5572
B
7%
1.0
$1,014.8980
C
5%
1.5
$981.4915
Assume that coupons are paid every 6 months and the face values of
all the bonds are $1,000.
(a) Determine the spot rate curve. (That is, determine
s0.5, s1, and
s1.5 in yearly terms.) (Keep 4 decimal places,
e.g. 0.1234)
s0.5:
s1:
s1.5 :
(b) Suppose that the 0.5- and 1.5-year zero-coupon bonds are...
Consider the following three bonds: Bond Coupon Rate Maturity (years) Price A 0% 1.0 $947.5572 B...
Consider the following three bonds:
Bond
Coupon Rate
Maturity (years)
Price
A
0%
1.0
$947.5572
B
7%
1.0
$1,014.8980
C
5%
1.5
$981.4915
Assume that coupons are paid every 6 months and the face values of
all the bonds are $1,000.
(a) Determine the spot rate curve. (That is, determine
s0.5, s1, and
s1.5 in yearly terms.) (Keep 4 decimal places,
e.g. 0.1234)
s0.5:
s1: s1.5
:
(b) Suppose that the 0.5- and 1.5-year zero-coupon bonds are
available. Determine their...
Consider the following three bonds: Bond Coupon Rate Maturity (years) Price A 0% 1.0 $947.5572 B...
Consider the following three bonds:
Bond
Coupon Rate
Maturity (years)
Price
A
0%
1.0
$947.5572
B
7%
1.0
$1,014.8980
C
5%
1.5
$981.4915
Assume that coupons are paid every 6 months and the face values of
all the bonds are $1,000.
(a) Suppose that the 0.5- and 1.5-year zero-coupon bonds are
available. Determine their respective prices. (Keep 2 decimal
places, e.g. xxx.12)
PZ0.5:
PZ1.5:
(b) Determine the forward rate f 0.5,1 (in
yearly term) on a 6-month Treasury bill...
Consider the following three bonds: Bond Price Coupon Rate Time-to-Maturity A 96.000 8% 6 years B...
Consider the following three bonds:
Bond
Price
Coupon Rate
Time-to-Maturity
A
96.000
8%
6 years
B
98.000
9%
8 years
C
105.000
9%
6 years
Which bond will most likely experience the smallest percentage
change in price if the market discount rate for all three bonds
increases by 100 basis points? Explain your logic in 2-4 sentences.
Show Calculations and Formulas of how you arrived to this
answer.
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