Question
In: Finance
2. Yield value of a price change is defined as the difference change is the difference...
2. Yield value of a price change is defined as the difference change is the difference in the yields calculated at the two price levels. Assuming the par value is $1,000, what’s the yield value of a $50 increase of the following two bonds?
(1) A 7-year 4% semiannual bond with YTM 6% and par $1,000
(2) A 7-year 8% semiannual bond with YTM 6% and par $1,000
(3) Which bond has higher percentage price volatility? Comment.
Solutions
jeff jeffy answered 2 years agoRelated Solutions
why occurrence change in bond price as a function of change in yield to maturity and...
why occurrence change in bond price as a function of change in
yield to maturity and discuss how duration impacts the sensitivity
of a bond. why is the feature a concern? what does this mean for
investors? can investors avoid this feature, why or why not?
why occurrence change in bond price as a function of change in yield to maturity and...
why occurrence change in bond price as a function of change in
yield to maturity and discuss how duration impacts the sensitivity
of a bond.
why is the feature a concern?
what does this mean for investors?
can investors avoid this feature, why or why not?
What is the percentage change in price for a zero coupon bond if the yield changes...
What is the percentage change in price for a zero coupon bond if
the yield changes from 5% to 8%? The bond has a face value of
$1,000 and it matures in 12 years. Use the price determined from
the first yield, 5%, as the base in the percentage calculation.
What is the percentage change in price for a zero coupon bond if the yield changes...
What is the percentage change in price for a zero coupon bond if
the yield changes from 6% to 7%? The bond has a face value of
$1,000 and it matures in 13 years. Use the price determined from
the first yield, 6%, as the base in the percentage
calculation.
What is the percentage change in price for a zero coupon bond if the yield changes...
What is the percentage change in price for a zero coupon bond if
the yield changes from 8.5% to 8%? The bond has a face value of
$1,000 and it matures in 15 years. Use the price determined from
the first yield, 8.5%, as the base in the percentage calculation.
The percentage change in the bond price if the yield changes from
8.5% to 8% is ____%. (Round to two decimal places.)
3. What is the percentage change in price for a zero coupon bond if the yield...
3. What is the percentage change in price for a zero coupon bond
if the yield changes from
9%
to
6%?
The bond has a face value of
$1,000
and it matures in
16
years. Use the price determined from the first yield,
9%,
as the base in the percentage calculation.
What is the percentage change in price for a zero coupon bond if the yield changes...
What is the percentage change in price for a zero coupon bond if
the yield changes from
8.5%
to
5.5%?
The bond has a face value of
$1,000
and it matures in
19
years. Use the price determined from the first yield,
8.5%,
as the base in the percentage calculation.
What is the percentage change in price for a zero coupon bond if the yield changes...
What is the percentage change in price for a zero coupon bond if
the yield changes from 6.5% to 9%? The bond has a face value of
$1,000 and it matures in 20 years. Use the price determined from
the first yield, 6.5%, as the base in the percentage
calculation.
1)What is the percentage change in price for a zero coupon bond if the yield changes...
1)What is the percentage change in price for a zero coupon bond
if the yield changes from 5.5% to 9%? The bond has a face value
of $1,000 and it matures in 11 years. Use the price determined
from the first yield, 5.5%, as the base in the percentage
calculation. The percentage change in the bond price if the yield
changes from 5.5% to 9% is %
2)With celebrity bonds, celebrities raise money by issuing
bonds to investors. The royalties...
“A low-coupon security is more price-volatile [in response to a given change in yield that a...
“A low-coupon security is more price-volatile [in
response to a given change in yield that a high-coupon security.”
True or false, or what? Explain carefully.
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