URGENT ANSWERS PLUS EXPLANATIONS-HOW YOU GOT ANSWER PLEASE. (Interest Rate Sensitivity) An investor purchased the following...

URGENT ANSWERS PLUS EXPLANATIONS-HOW YOU GOT ANSWER PLEASE.

(Interest Rate Sensitivity) An investor purchased the following 4 bonds. Each bond had a face(par) value of $1,000 and an 6% yield to maturity on the purchase day. Immediately after the investor purchased them, interest rates changed, and each then had a new YTM (7% or 5%). What is the percentage change in price for each bond after the decline in interest rates? Fill in the following table with your answers.

Bond	Price@5%	Price@7%	Price Gain/Loss (Percentage Change)
10-year, 6.5% annual coupon
30-year, 12% annual coupon
10-year,zero coupon
30-year,zero coupon

(Bond Price and Duration) Consider a 6-year 4% coupon bond with a face value of $1,000. Coupons are paid annually. The yield is 3.8%.
1. Use the following table to compute the duration.

year (t)	cash flow	PV=CF/(1+r)^t	PV*t
1
2
3
4
5
6
	Total

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Expert Solution

jeff jeffy answered 1 year ago

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