Make semiannual payments and are priced at par value

Assignment Help Financial Management

Reference no: EM131456118

Both Bond Sam and Bond Dave have 9 percent coupons, make semiannual payments, and are priced at par value. Bond Sam has four years to maturity, whereas Bond Dave has 15 years to maturity.

If interest rates suddenly rise by 2 percent, what is the percentage change in the price of Bond Sam and Bond Dave? (Negative amounts 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 of Bond Sam____________________ %

Percentage change in price of Bond Dave____________________ %

If rates were to suddenly fall by 2 percent instead, what would be the percentage change in the price of Bond Sam and Bond Dave? (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 of Bond Sam___________________ %

Percentage change in price of Bond Dave____________________ %

Reference no: EM131456118

Questions Cloud

What is the appropriate classification of this lease : Jostens, Inc leases a machine from Justins Leasing. What is the appropriate classification of this lease for Jostens?

Who are managing other peoples money : Discuss this statement in the context of those who are managing their own money and those who are managing other people’s money.

How the sales value of surplus equipment was calculated : Please complete in whole dollars and explain how the sales value of surplus equipment was calculated.

Total bond value does the repayment of principal represent : If the percent yield to maturity is 12 percent, what percent of the total bond value does the repayment of principal represent?

Make semiannual payments and are priced at par value : Both Bond Sam and Bond Dave have 9 percent coupons, make semiannual payments, and are priced at par value.

Determine the price of the bonds : determine the price of the bonds at January 1, 2016. prepare the journal entry to record the bond issuance by Bishop on january 1, 2016.

Calculate the terminal capitalization rate : Calculate the terminal capitalization rate? Calculate the NPV using a 14 percent discount rate. What does the number mean?

Assume that market portfolio is not efficient : Suppose you are collecting information about these two firms: Assume that the market portfolio is not efficient.

Received credit card with nominal interest rate : Susan recently received a credit card with a nominal interest rate of 19 percent.

User Account

All Pages