Question
In: Finance
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.)
Solutions
Expert Solution
We determine the initial price and changed price using excel PV function. The dollar change in price= New price- Old price.
Percentage change in price = Change in price/ Original price
= 7.7%
| Initial price | ($294.14) |
| Price after change in interest rate | ($315.24) |
| Change in bond price | $21.10 |
| Percentage change | 7.17% |
WORKINGS
jeff jeffy answered 1 year agoRelated Solutions
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
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...
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 price change for a zero coupon bond if its YTM changes from...
What is the percentage price change for a zero coupon bond if
its YTM changes from 3.9% to 4.6%? The bond's face value is $1,000
and it matures in 8 years. Use the price determined from the first
yield, 3.9%, as the base in the percentage calculation. Round to
the nearest tenth of a percent. (e.g., 4.32% = 4.3). [Hint: If the
price dropped, enter a negative number].
If the yield to maturity changes to 12 percent, what should be the percentage price change of the bond?
A bond has a duration of seven years and a yield to maturity of
7.5 percent. If the yield to maturity changes to 12 percent, what
should be the percentage price change of the bond?
Zero Coupon Bond Price Calculate the price of a zero coupon bond that matures in 9...
Zero Coupon Bond Price Calculate the price of a
zero coupon bond that matures in 9 years if the market interest
rate is 8 percent. Assume semi-annual interest payments and $1,000
par value. (Round your answer to 2 decimal places.)
Multiple Choice
$920.00
$500.25
$493.63
$1,000.00
Year Zero-coupon bond yield (Sport rate) Zero-coupon bond price 1-year implied forward rate Par coupon rate...
Year
Zero-coupon bond yield (Sport rate)
Zero-coupon bond price
1-year implied forward rate
Par coupon rate
1
5%
a
2
b
c
d
6%
Please find out the values of a,b,c and d.
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- You are tasked with assessing the health department’s intervention program in preventing recurrence of acute alcohol...
- Compare the MOSFET, JFET , and BJT and identify the reasons these devices behave differently. What...
- How would you use SAS Enterprise Miner to create a neural network model of your example?
- Explain the use of neural networking modeling in predictive analytics.
- Current Market Mix of Netflix, as detail as possible, please.
- This is all one question, thank you so much in advance! You must evaluate a proposal...
- X Company is considering the purchase of a new processor that costs $200,000. Shipping and setup...
ADVERTISEMENT