Question
In: Finance
Both Bond Bill and Bond Ted have 11.2 percent coupons, make semiannual payments, and are priced...
|
Both Bond Bill and Bond Ted have 11.2 percent coupons, make semiannual payments, and are priced at par value. Bond Bill has 4 years to maturity, whereas Bond Ted has 21 years to maturity. Both bonds have a par value of 1,000. |
| a. |
If interest rates suddenly rise by 3 percent, what is the percentage change in the price of these bonds? |
| b. | If rates were to suddenly fall by 3 percent instead, what would be the percentage change in the price of these bonds? |
Solutions
jeff jeffy answered 2 years agoRelated Solutions
Both Bond Bill and Bond Ted have 12.4 percent coupons, make semiannual payments, and are priced...
Both Bond Bill and
Bond Ted have 12.4 percent coupons, make semiannual payments, and
are priced at par value. Bond Bill has 5 years to maturity, whereas
Bond Ted has 22 years to maturity. Both bonds have a par value of
1,000.
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...
Both Bond Bill and Bond Ted have 5.8 percent coupons, make semiannual payments, and are priced...
Both Bond Bill and Bond Ted have 5.8 percent coupons, make
semiannual payments, and are priced at par value. Bond Bill has 5
years to maturity, whereas Bond Ted has 25 years to maturity.
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...
Both Bond Bill and Bond Ted have 11 percent coupons, make semiannual payments, and are priced...
Both Bond Bill and Bond Ted have 11 percent coupons, make
semiannual payments, and are priced at par value. Bond Bill has 3
years to maturity, whereas Bond Ted has 20 years to maturity. Both
bonds have a par value of 1,000.
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...
Both Bond A and Bond B have 8 percent coupons, make semiannual payments, and are priced...
Both Bond A and Bond B have 8 percent coupons, make semiannual
payments, and are priced at par value. Bond A has 2 years to
maturity, whereas Bond B has 11 years to maturity.
(a) If interest rates suddenly rise by 1 percent, what is the
percentage change in the price of Bond A? [3 points]
(b) If interest rates suddenly rise by 1 percent, what is the
percentage change in the price of Bond B?
(c) If rates were...
Both Bond Sam and Bond Dave have 6 percent coupons, make semiannual payments, and are priced...
Both Bond Sam and Bond Dave have 6 percent coupons, make
semiannual payments, and are priced at par value. Bond Sam has 4
years to maturity, whereas Bond Dave has 14 years to maturity. If
interest rates suddenly rise by 2 percent, what is the percentage
change in the price of Bond Sam? • 6.83% • -6.71% • -6.73% • -7.22%
If interest rates suddenly rise by 2 percent, what is the
percentage change in the price of Bond Dave?...
Both Bond Sam and Bond Dave have 6 percent coupons, make semiannual payments, and are priced...
Both Bond Sam and Bond Dave have 6 percent coupons, make
semiannual payments, and are priced at par value. Bond Sam has two
years to maturity, whereas Bond Dave has 15 years to maturity.
a. If interest rates suddenly rise by 2 percent, what is the
percentage change in the price of Bond Sam and Bond Dave?
b. If rates were to suddenly fall by 2 percent instead, what
would be the percentage change in the price of Bond Sam...
Both Bond Sam and Bond Dave have 8 percent coupons, make semiannual payments, and are priced...
Both Bond Sam and Bond Dave have 8 percent coupons, make
semiannual payments, and are priced at par value. Bond Sam has 4
years to maturity, whereas Bond Dave has 12 years to maturity.
If interest rates suddenly rise by 4 percent, what is the
percentage change in the price of Bond Sam? -12.42%, 12.78%,
-12.40% ,-14.18%
If interest rates suddenly rise by 4 percent, what is the
percentage change in the price of Bond Dave? -25.10%, -25.08%
,27.45% ,-33.51%...
Both Bond Sam and Bond Dave have 9 percent coupons, make semiannual payments, and are priced...
Both Bond Sam and Bond Dave have 9 percent coupons, make
semiannual payments, and are priced at par value. Bond Sam has 2
years to maturity, whereas Bond Dave has 17 years to maturity.
(Do not round your intermediate calculations.)
Requirement 1:
(a)
If interest
rates suddenly rise by 2 percent, what is the percentage change in
the price of Bond Sam?
(b)
If interest
rates suddenly rise by 2 percent, what is the percentage change in...
Both Bond Sam and Bond Dave have 10 percent coupons, make semiannual payments, and are priced...
Both Bond Sam and Bond Dave have 10 percent coupons, make
semiannual payments, and are priced at par value. Bond Sam has 4
years to maturity, whereas Bond Dave has 17 years to maturity.
If interest rates suddenly rise by 3 percent, what is the
percentage change in the price of Bond Sam?
-10.05%
-9.11%
-9.13%
9.35%
If interest rates suddenly rise by 3 percent, what is the
percentage change in the price of Bond Dave?
...
Both Bond Sam and Bond Dave have 10 percent coupons, make semiannual payments, and are priced...
Both Bond Sam and Bond Dave have 10 percent coupons, make
semiannual payments, and are priced at par value. Bond Sam has 3
years to maturity, whereas Bond Dave has 17 years to maturity.
(Do not round your intermediate calculations.)
Requirement
1:
(a)
If interest rates suddenly rise
by 4 percent, what is the percentage change in the price of Bond
Sam?
(Click to select)9.78% -10.54%
-9.51% 10.85% -9.53%
(b)
If interest rates suddenly rise
by 4...
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