Find what would be the percentage change in price of bond

Assignment Help Finance Basics
Reference no: EM131948142

Question: Both bond A and bond B have 9.6 percent coupons and are priced at par value. Bond A has 8 years to maturity, while bond B has 20 years to maturity.

a. If interest rates suddenly rise by 2.2 percent, what is the percentage change in price of bond A and bond B? (Negative answers should be indicated by a minus sign. Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. Omit the "%" sign in your response.) Bond A % Bond B %

b. If interest rates suddenly fall by 2.2 percent instead, what would be the percentage change in price of bond A and bond B? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. Omit the "%" sign in your response.) Bond A % Bond B %

Reference no: EM131948142

Questions Cloud

Risks of overpopulation have been grossly overstated : Do you believe that the U.S. should be concerned about overpopulation and that immediate action is warranted, or do you believe that the risks of overpopulation
What should be the current price : A bond has a 7.5 percent annual coupon rate. It will mature in 5 years, and semi-annual coupon pay­ments are made at the end of each year.
Define the term specific performance : Define the term specific performance, and explain how and when this remedy typically is used by the courts.
How the risks of coming out are exemplified in the episode : How are the concepts of homophobia, biphobia and transphobia exemplified in the experiences of those in the episode?
Find what would be the percentage change in price of bond : Both bond A and bond B have 9.6 percent coupons and are priced at par value. Bond A has 8 years to maturity, while bond B has 20 years to maturity.
How would you show respect when doing business : Identify, Analyze, and Discuss organization behavior following list Organization Behavior topics. Include antecedents (causes), impacts
What is the price of the bond : A bond has a coupon rate of 8.2 percent and 9 years until maturity. If the yield to maturity is 7.4 percent, what is the price of the bond?
Identify and describe trends in the market environment : Identify and briefly describe four trends in the macro /market environment
Identify and briefly describe trends in macro-environment : Identify and briefly describe four trends in the macro /market environment

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd