What do you think is the significance of financial rations

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Reference no: EM131880171

1. Phil owns a 7 percent, semiannual coupon bond that has a face value of $1,000 and matures in 16 years. The bond has a current yield to maturity of 71 percent. What will the percentage change in the price of his bond be if interest rates decrease by 50 basis points?

2. Consider a coupon bond with a face value of $1,000 with a 4.25% coupon rate (paid annually) and 14 years to maturity. If the current market price of the bond is $925.76, what is the yield-to-maturity?

3. What do you think is the significance of financial rations? What do you think their limitations are? Please explain in paragrah form.

Reference no: EM131880171

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