In: Finance
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 as a percent
rounded to 2 decimal places, e.g., 32.16.)
Percentage change in price |
|
Bond Bill | % |
Bond Ted | % |
If rates were to suddenly fall by 3 percent instead, what would be the percentage change in the price of these bonds? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)
Percentage change in price |
|
Bond Bill | % |
Bond Ted | % |