Solution-What do you expect to happen to long term bonds

What do you expect to happen to long term bonds yields

Reference no: EM13338692

The current rate of inflation is 3% and the long term Treasury bonds are yielding 7%. You estimate that the rate of inflation will increase to 6%.
what do you expect to happen to long term bonds yields? Compute the effect of this estimated change in inflation on the price of
a 15 year, 10% coupon bond with a current yield to maturity of 8%?

Reference no: EM13338692

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What do you expect to happen to long term bonds yields

Reference no: EM13338692

Reference no: EM13338692

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