Relationship between prices-yields and maturity

Assignment Help Business Management

Reference no: EM13971343

U.S. Treasury STRIPS, close of business 05/15/12
Maturity	Price
May-13	99.624
May-14	99.218
May-15	98.686
May-16	97.682
May-17	96.375
May-18	94.686

Suppose the (quoted) yield on each of the six STRIPS increases by .05%. Calculcate the percentage change in price for the one year, three year, and six year STRIPS. Which one has th elargest price change? Now suppose that the quoted price on each STRIPS decreases by .500. Calculate the percentage change in (quoted) yield for the one year, three year, and six year STRIPS. Which one has the largest yield change? What do your answers tell you about the relationship between prices, yields, and maturity for discount bonds?

Reference no: EM13971343

Questions Cloud

What are the estimated total monthly fixed costs : What is the estimated monthly contribution margin per cable subscriber for CableVision in 2016 - what are the estimated total monthly fixed costs for CableVision in 2016?

What are the cystoscopy department total expenses : What are the Day Op Suite's total expenses? What are the Cystoscopy Department's total expenses? What are the Endoscopy Department's total expenses?

Designing good products and technologies : Understanding users is crucial to designing good products and technologies, and typically requires to use a variety of methods and almost always to use more than one method for any given project.

Do you arrest dianne for her actions at computer depot : When you arrive, do you arrest Dianne for her actions at Computer Depot? Why or why not? If you do arrest her, what do you charge her with

Relationship between prices-yields and maturity : Now suppose that the quoted price on each STRIPS decreases by .500. Calculate the percentage change in (quoted) yield for the one year, three year, and six year STRIPS. Which one has the largest yield change? What do your answers tell you about th..

Describe how you will measure progress toward your success. : How have the content and Assignments shaped your goals now and how do you anticipate they will shape your goals in the future?

What is the beat frequency that is detected by the listener : When stationary the speakers both play a tone whose frequency is 100 Hz. They are situated at opposite ends of a diameter. The speed of sound is 343 m/s and the merry go round revolves once every 20s. What is the beat frequency that is detected by..

What is the value of m1 : Use the figures below to answer the following questions. Numbers are in billions.

Financial information about danni flinn : Use the following financial information about Danni Flinn: she earns $625 in wages from her job at the bookstore every 2 weeks her parents give her $400 every month

User Account

All Pages