A bond trader purchased each of the following bonds at a yield to maturity of 8%. Immediately after she purchased the bonds, interest rates fell to 6%. What is the percentage change in the price of each bond after the decline in interest rates? Assume annual coupons and annual compounding. Fill in the following table. Do not round intermediate calculations. Round your answers to two decimal places. Price @ 8% 10-year, 10% annual coupon $ fill in the blank 2 10-year zero 5-year zero fill in the blank 5 fill in the blank 8 fill in the blank 11 30-year zero $100 perpetuity fill in the blank 14 Price @ 6% $ fill in the blank 3 fill in the blank 6 fill in the blank 9 fill in the blank 12 fill in the blank 15 Percentage Change fill in the blank 4 % fill in the blank 7% fill in the blank 10 % fill in the blank 13 % fill in the blank 16 %
A bond trader purchased each of the following bonds at a yield to maturity of 8%. Immediately after she purchased the bonds, interest rates fell to 6%. What is the percentage change in the price of each bond after the decline in interest rates? Assume annual coupons and annual compounding. Fill in the following table. Do not round intermediate calculations. Round your answers to two decimal places. Price @ 8% 10-year, 10% annual coupon $ fill in the blank 2 10-year zero 5-year zero fill in the blank 5 fill in the blank 8 fill in the blank 11 30-year zero $100 perpetuity fill in the blank 14 Price @ 6% $ fill in the blank 3 fill in the blank 6 fill in the blank 9 fill in the blank 12 fill in the blank 15 Percentage Change fill in the blank 4 % fill in the blank 7% fill in the blank 10 % fill in the blank 13 % fill in the blank 16 %
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter4: Bond Valuation
Section: Chapter Questions
Problem 16P: Interest Rate Sensitivity
A bond trader purchased each of the following bonds at a yield to maturity...
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